Xerox Corp. Stock Retreats Following Q4 Results

Xerox Corp. (NYSE:XRX), the global digital printing company, saw shares drop 3% in early afternoon trading on February 2. The stock has climbed 10.3% in 2018 thus far. The company released its 2017 fourth quarter and full-year results on January 31.

Xerox reported total revenue of $2.7 billion which represented a 0.5% increase year over year. Equipment sale revenue jumped 4.3% or 1.5% in constant currency from Q4 2016. Xerox was forced to incur a non-cash charge of $400 million due to the U.S. Tax Cuts and Jobs Act. The company is confident that tax reform will have a positive impact moving forward.

On January 31 the Japanese company Fujifilm Holdings announced that it would take over Xerox in a restructuring intended to reduce costs. Fujifilm Holdings will take a 50.1% stake in the company. The merger is expected to save $1.7 billion annually by 2022. Fujifilm technologies like high-speed inkjet commercial and industry printing will be used to propel expansion going forward. Jeff Jacobson, President and CEO of Xerox, will become the CEO of new Fuji Xerox.

Xerox Corp. offers a dividend of $0.25 per share representing a 3.1% dividend yield. The cost savings from the merger with Fujifilm combined with the benefits of tax reform should place Xerox on improved footing heading into the next decade.