Xerox Corporation (XRX - Analyst Report) recently offered an overview of its long-term strategic plans to increase shareholder value through an optimum mix of margin expansion and growth in services, focus on vertical markets and innovative technology and services. The news boosted investor sentiment as the shares gained 4% to close at $10.69 on Nov 12.
The Key Initiatives
In order to better adapt to the evolving market trends, Xerox has
continually realigned its business model by expanding indirect
distribution channel and streamlining its supply chain and product
portfolio. Going forward, the company expects to increase revenues from the Services segment to 66% of total revenue by 2017 from 56% at present.
To achieve this objective, Xerox is focusing more on vertical markets like healthcare.
The company has already begun to reap huge benefits from Medicaid
Management Information System (MMIS) through the successful
implementation and CMS (Centers for Medicare and Medicaid Services)
Certification in 31 state Medicaid programs.
In addition, proprietary software developed by its subsidiary PARC has
gained wide acceptance in the industry to combat fraud, waste and abuse
in healthcare applications. Xerox has also launched health insurance
exchanges in Nevada, Kentucky and other states to further strengthen its
position in the healthcare services market.
In tune with the increased demand for connectivity and mobility, Xerox is integrating its market-leading Managed Print Services (MPS) with its business process and IT outsourcing capabilities.
MPS enables clients to gain visibility and control of printing to save
money, improve productivity, boost environmental sustainability and
document security. The integration will automate workflow with
technology and consulting services to help clients meet the requirements
of mobile workforce.
At the same time, Xerox is continuing its thrust for leadership in Document Technology
with innovative products in order to meet the demands of customized
communications in digital printing. These include waterless and
inkjet-based solutions that enable print providers to deliver
Xerox also provided its initial guidance for 2014 and reiterated its
guidance for full year 2013. GAAP earnings for 2014 are expected to be
in the range of 93 cents to 99 cents and adjusted earnings are expected
between $1.10 and $1.16. The company expects operating cash flow to
range from $1.8 billion to $2.0 billion in 2014.
Xerox increased its authorization for share repurchases by $500 million
to bring the tally to approximately $1.5 billion. The company
anticipates spending up to $500 million on acquisitions and $300 million
on dividends in 2014.
Headquartered in Norwalk, CT, Xerox is a leader in the development,
manufacture, marketing, servicing and financing of document equipment
across the world. The company also provides extensive leading-edge
document technology, services, software and genuine Xerox supplies for
graphic communication and office printing environments of any size.