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NEW YORK - Xerox Holdings Corporation (NASDAQ:XRX) reported fourth-quarter results that fell short of analyst expectations, but provided an optimistic outlook for 2025.
The document technology and services company posted adjusted earnings per share of $0.36, missing the consensus estimate of $0.67. Revenue came in at $1.61 billion, below analysts' expectations of $1.69 billion and down 8.6% year-over-year.
Despite the earnings miss, Xerox outlined a positive forecast for 2025. The company expects low single-digit revenue growth in constant currency and an adjusted operating margin of at least 5.0%. Free cash flow is projected to be between $350 million and $400 million.
"2024 was a critical year as we implemented a new operating model and structural process improvements to position Xerox for long-term, sustainable growth," said Steve Bandrowczak, CEO of Xerox. "We continue to see steady progress in our Reinvention, reflecting the resilience of our team and initiatives taken to-date."
The company's equipment sales declined 14.2% YoY to $393 million in Q4, while post-sale revenue fell 6.7% to $1.2 billion. Xerox attributed part of the decline to the release of backlog in the prior year and other Reinvention actions.
Adjusted operating income increased to $104 million from $96 million in the year-ago quarter, with the adjusted operating margin improving to 6.4% from 5.4%.
Xerox's 2025 guidance does not include any impacts from its pending acquisition of Lexmark, which is expected to close in the second half of the year. The company views this acquisition, along with the recently closed ITsavvy deal, as key to improving core operations and accelerating its medium-term goals.
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