Xerox made it official early Friday morning. It will split into two publicly-traded companies, one for Document Technology, the other for Business Process Outsourcing. It expects to accomplish that by the end of the year.
The company says Document Technology will continue to be a leader in document management and document outsourcing, and it says that Business Process Outsourcing, as an independent company, will have the focus and flexibility needed to continue to adapt to the changing needs of its clients.
Chairman and CEO Ursula Burns says the company is taking affirmative steps to drive shareholder value, and she says that she is confident "the extensive structural review we conducted over the last few months has produced the right path forward for our company."
Xerox is also announcing a three year "strategic transformation program" which is targeting $2.4 billion savings across all segments. The company expects $700 million in savings this year.
Billionaire investor Carl Icahn, who has amassed a more than 8 percent stake in Xerox, was rumored to have had something to do with the decision to split into two companies. But in a CNBC interview Friday morning, Burns said that wasn't the case. She said, "“we told him what our decision was, he was pleased with the outcome, we’re happy that he is in support of it, but he had nothing to do with the initiation, the contemplation, the analysis or any discussion around the deal."
Burns also did not say definitively whether she would be staying with Xerox after the split is complete. She says that's something she will need to discuss with the board of directors. But she did say she feels Xerox has strong management teams in place.
Xerox reported 4th quarter earnings on Friday. Adjusted earnings per share of .32 beat Wall Street's expectations, but revenues of $4.7 billion came in a little less than analysts expected.
Document technology revenues also took a hit. Brighton Securities Chairman George Conboy says that raises concerns about staffing levels in the new document technology division.
"Sales for the copier unit which is primarily here in Rochester, 6500 people here, down 10 percent. That's a real concern, because if you're not going to have the other half of the business, the services business, bringing in some money, to help shore up a unit whose sales are down 10 percent, where are you going with jobs?"
Xerox also announced Friday that it will raise its quarterly dividend 11 percent to 7.75 cents.