UPDATE: Xerox Corp. (XRX) Tops Q4 EPS by 10c, Revenues Miss; Offers FY19 EPS Guidance Above Consensus, Authorizes Additional $1B Share Buyback
Xerox Corp. (NYSE: XRX) reported Q4 EPS of $1.14, $0.10 better than the analyst estimate of $1.04. Revenue for the quarter came in at $2.53 billion versus the consensus estimate of $2.56 billion.
- Operating cash flow of $415 million in the quarter increases $564 million year-over-year, or $83 million year-over-year on an adjusted basis.
- Operating cash flow of $1.14 billion for the full year exceeds guidance and increases $1.32 billion year-over-year, or $168 million year-over-year on an adjusted basis.
- GAAP EPS from continuing operations of $0.56 in the quarter, an increase of $1.34 year-over-year; prior year included a $400 million charge associated with the enactment of U.S. tax reform.
- Adjusted EPS of $1.14 in the quarter, an increase of $0.11 year-over-year.
- Adjusted operating margin of 16.1 percent in the quarter expands 180 basis points year-over-year.
- Returned $969 million to shareholders in the form of share repurchases and dividends for the full year.
- Announcing 2019 full year guidance that includes delivering operating cash flow of $1.15 to $1.25 billion and free cash flow of $1.0 to $1.1 billion.
- 2019 full year guidance also includes expanding adjusted operating margin between 100 and 150 basis points year-over-year, as well as earnings growth that results in GAAP EPS of $2.60 to $2.70 and adjusted EPS of $3.70 to $3.80.
- Board approves incremental share repurchase authority of $1.0 billion; company expects at least $300 million of share repurchases in 2019.
“Our Q4 results reflect continued progress on our strategic initiatives to optimize our operations, re-energize our innovation engine and increase shareholder returns,” said Xerox Vice Chairman and CEO John Visentin. “We remain focused on removing complexity in the way we work, organizing more effectively, and creating a better customer experience, and we are seeing those efforts reflected in this quarter’s results.
“We are well positioned as we enter 2019 to continue to build on all our initiatives to deliver greater shareholder value. We look forward to sharing the details around our strategy and three-year financial expectations at our investor day on February 5.”
GUIDANCE:
Xerox Corp. sees FY2019 EPS of $3.70-$3.80, versus the consensus of $3.53.
- Operating cash flow between $1.15 and $1.25 billion and free cash flow between $1.0 and $1.1 billion.
- Revenue decline of approximately 5% at constant currency.
- Adjusted operating margin of 12.6 percent to 13.1 percent, an expansion of between 100 and 150 basis points year-over-year. In 2019, we are revising our definition of adjusted operating margin to exclude equity income.
- GAAP earnings between $2.60 and $2.70 per share.
- Adjusted earnings between $3.70 and $3.80 per share.
For earnings history and earnings-related data on Xerox Corp. (XRX) click here.