Xerox reports fourth-quarter revenue down 7.9 percent
Xerox Holdings Corp. announced 2021 fourth-quarter and full-year results and guidance for 2022. The company reported $1.78 billion of revenue in Q4, down 7.9 percent year-over-year, or down 7.4 percent in constant currency; $7.04 billion of FY revenue, up 0.2 percent year-over-year, or down 1.4 percent in constant currency.
“Our team’s focus and dedication drove improved results in 2021 despite ongoing challenges caused by the pandemic and global supply chain disruptions,” said John Visentin, Vice Chairman and CEO, Xerox. “Our ability to increase free cash flow, while investing for sustainable, long-term growth and improving our operations, highlights the quality of our team and strategy. We stood up Xerox Financial Services, CareAR and Innovation (PARC), while laying the foundation for growth in print, digital solutions, and IT services. We look forward to sharing more detail about our long-term plans and strategies for monetizing our investments in growth at our Investor Day in February.”
|
Fourth-Quarter Key Financial Results: |
||||
|
(in millions, except per share data) |
Q4 2021 |
Q4 2020 |
B/(W) |
% Change |
|
Revenue |
$1,777 |
$1,930 |
$(153) |
(7.9) % AC (7.4) % CC1 |
|
Gross Margin |
32.9% |
36.2% |
(330) bps |
|
|
RD&E % |
4.2% |
3.9% |
(30) bps |
|
|
SAG % |
23.8% |
22.8% |
(100) bps |
|
|
Pre-Tax (Loss) Income1 |
$(711) |
$103 |
$(814) |
NM |
|
Pre-Tax (Loss) Income Margin |
(40.0)% |
5.3% |
NM |
|
|
Operating Income – Adjusted2 |
$86 |
$184 |
$(98) |
(53.3)% |
|
Operating Margin – Adjusted2 |
4.8% |
9.5% |
(470) bps |
|
|
GAAP (Loss) Earnings per Share1 |
$(3.97) |
$0.36 |
$(4.33) |
NM |
|
Earnings Per Share – Adjusted2 |
$0.34 |
$0.58 |
$(0.24) |
(41.4)% |
|
Full-Year Key Financial Results: |
||||
|
(in millions, except per share data) |
FY 2021 |
FY 2020 |
B/(W) |
% Change |
|
Revenue |
$7,038 |
$7,022 |
$16 |
0.2 % AC (1.4) % CC1 |
|
Gross Margin |
34.1% |
37.4% |
(330) bps |
|
|
RD&E % |
4.4% |
4.4% |
– |
|
|
SAG % |
24.4% |
26.4% |
200 bps |
|
|
Pre-Tax (Loss) Income1 |
$(475) |
$252 |
$(727) |
NM |
|
Pre-Tax (Loss) Income Margin |
(6.7)% |
3.6% |
NM |
|
|
Operating Income – Adjusted2 |
$375 |
$464 |
$(89) |
(19.2)% |
|
Operating Margin – Adjusted2 |
5.3% |
6.6% |
(130) bps |
|
|
GAAP (Loss) Earnings per Share1 |
$(2.56) |
$0.84 |
$(3.40) |
NM |
|
Earnings Per Share – Adjusted2 |
$1.51 |
$1.41 |
$0.10 |
7.1% |
2022 Guidance
The company expects to grow revenue in 2022, the company, assuming supply chain and pandemic-related disruptions persist through the first half of the year. The company also expects to generate at least $400 million of free cash flow, inclusive of incremental cash investments in new businesses.
|
XEROX HOLDINGS CORPORATION |
||||||||||||||
|
|
|
Three Months Ended |
|
Year Ended |
||||||||||
|
(in millions, except per-share data) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||
|
Revenues |
|
|
|
|
|
|
|
|
||||||
|
Sales |
|
$ |
653 |
|
|
$ |
773 |
|
$ |
2,582 |
|
|
$ |
2,449 |
|
Services, maintenance and rentals |
|
|
1,069 |
|
|
|
1,101 |
|
|
4,235 |
|
|
|
4,347 |
|
Financing |
|
|
55 |
|
|
|
56 |
|
|
221 |
|
|
|
226 |
|
Total Revenues |
|
|
1,777 |
|
|
|
1,930 |
|
|
7,038 |
|
|
|
7,022 |
|
Costs and Expenses |
|
|
|
|
|
|
|
|
||||||
|
Cost of sales |
|
|
476 |
|
|
|
541 |
|
|
1,862 |
|
|
|
1,742 |
|
Cost of services, maintenance and rentals |
|
|
691 |
|
|
|
658 |
|
|
2,662 |
|
|
|
2,533 |
|
Cost of financing |
|
|
26 |
|
|
|
32 |
|
|
111 |
|
|
|
121 |
|
Research, development and engineering expenses |
|
|
75 |
|
|
|
75 |
|
|
310 |
|
|
|
311 |
|
Selling, administrative and general expenses |
|
|
423 |
|
|
|
440 |
|
|
1,718 |
|
|
|
1,851 |
|
Goodwill impairment |
|
|
781 |
|
|
|
— |
|
|
781 |
|
|
|
— |
|
Restructuring and related costs, net |
|
|
(1 |
) |
|
|
29 |
|
|
38 |
|
|
|
93 |
|
Amortization of intangible assets |
|
|
13 |
|
|
|
22 |
|
|
55 |
|
|
|
56 |
|
Transaction and related costs, net |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
18 |
|
Other expenses, net |
|
|
4 |
|
|
|
30 |
|
|
(24 |
) |
|
|
45 |
|
Total Costs and Expenses |
|
|
2,488 |
|
|
|
1,827 |
|
|
7,513 |
|
|
|
6,770 |
|
(Loss) Income before Income Taxes & Equity Income(1) |
|
|
(711 |
) |
|
|
103 |
|
|
(475 |
) |
|
|
252 |
|
Income tax (benefit) expense |
|
|
(36 |
) |
|
|
28 |
|
|
(17 |
) |
|
|
64 |
|
Equity in net income of unconsolidated affiliates |
|
|
1 |
|
|
|
2 |
|
|
3 |
|
|
|
4 |
|
Net (Loss) Income |
|
|
(674 |
) |
|
|
77 |
|
|
(455 |
) |
|
|
192 |
|
Less: Net income attributable to noncontrolling interests |
|
|
1 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
Net (Loss) Income Attributable to Xerox Holdings |
|
$ |
(675 |
) |
|
$ |
77 |
|
$ |
(455 |
) |
|
$ |
192 |
|
|
|
|
|
|
|
|
|
|
||||||
|
Basic (Loss) Earnings per Share |
|
$ |
(3.97 |
) |
|
$ |
0.37 |
|
$ |
(2.56 |
) |
|
$ |
0.85 |
|
Diluted (Loss) Earnings per Share |
|
$ |
(3.97 |
) |
|
$ |
0.36 |
|
$ |
(2.56 |
) |
|
$ |
0.84 |