On Jan. 23, Xerox (NYSE:XRX) released fourth-quarter and year-end results for the period ended Dec. 31.

  • Sales grew 3% to $4.4 billion.
  • Total diluted earnings fell 18.5% because of a hefty restructuring charge. Excluding the charge, earnings came in at $0.38, a penny above expectations.
  • Free cash flow came in at $700 million, well above reported net income.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q4 2006

Q4 2005

Change

Sales

$4,340

$4,379

$4,250

3.0%

Net Profit

--

$214

$282

(24.1%)

EPS

$0.37

$0.22

$0.27

(18.5%)

Diluted Shares

977

1,039

(6.0%)

For the three months ended Dec. 31, 2006, and Dec. 31, 2005.

Get back to basics with a look at the income statement.

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

36.42%

36.52%

(0.10)

Operating Margin

5.57%

8.16%

(2.59)

Net Margin

4.89%

6.64%

(1.75)

*Expressed in percentage points. Gross margin is for equipment sales.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Investments

$1,536

$1,566

(1.9%)

Accounts Receivable

$2,199

$2,037

8.0%

Inventory

$1,163

$1,201

(3.2%)



Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable

$1,133

$1,043

8.6%

Long-Term Debt

$5,660

$6,139

(7.8%)



Learn the ways of the balance sheet.

Cash Flow Highlights

Q4 2006

Q4 2005

Change

Cash From Ops.

$720

$631

$89

Capital Expenditures

$20

$54

($34)

Free Cash Flow

$700

$577

$123

For the three months ended Dec. 31, 2006, and Dec. 31, 2005.

Find out why Fools always follow the money.

Related Companies:

  • Canon (NYSE:CAJ)
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Related Foolishness:

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. The Fool has an ironclad disclosure policy. Feel free to email him with feedback or to discuss any companies mentioned further.