Xerox has culminated its journey back to profitability with the announcement yesterday of its first quarterly dividend in six years. 

At its investor conference, the company outlined how a combination of affordable colour technology, innovative document services, broader distribution to businesses of any size and advancements in digital commercial printing is enabling Xerox to attack a $125-billion market opportunity.
Chairman and CEO Anne Mulcahy and other Xerox executives described how Xerox's strategy has created a business model that generates strong operating cash flow, double-digit earnings expansion, and the financial flexibility to make accretive acquisitions, buy back stock and, as announced earlier today, declare a dividend for shareholders.
"By focusing on fundamental drivers of building a healthy business and maximizing our core strengths in the industry, we've established a strong, credible track record," says Mulcahy. "We have returned to investment grade and consistently grown earnings in the 10% to 15% range. We are generating operating cash flow of about $1,5-billion a year and producing an annuity stream that is powering our engine of growth.
"As a result, we are making targeted, strategic investments for the future. We're focused on accretive acquisitions to deliver more document management services, advanced technology for customized digital printing, affordable colour systems, and more distribution channels to reach the small and mid-sized business market.
"Delivering greater shareholder returns is paramount in everything we do. We're furthering that commitment today through the declaration of a dividend. And, we'll continue buying back stock, building on our $2-billion in share repurchase in the last two years."
Last week, Moody's Investors Service upgraded its investment grade credit rating on Xerox and issued a positive outlook, noting the company's solid competitive position, stable profitability, and solid free cash flow generation.
Xerox also outlined expectations for 2008, with earnings per share expected to grow to the range of $1.31 to $1.35, and double-digit earnings expansion continuing in 2009 to the range of $1.45 to $1.50. Xerox also reiterated it is on track to deliver full-year 2007 earnings per share in the range of $1.18 to $1.20.
"There is an explosion of information happening, yet people demand quick access to relevant content that cuts through the clutter," says Mulcahy. "Add to it ever increasing complexity and you have a set of trends that play right into Xerox's sweet spot – the management and sharing of information.
"Ever since Chester Carlson's invention of xerography and the launch of Xerox, we have been focused on making it easier, faster and less costly to share information. It doesn't matter what form the information might take, Xerox has the technology and services to help manage the content and improve communications."