ROCHESTER, N.Y. — Xerox Corp. finally set its business services division free with shares jumping roughly 16% in early afternoon trading after upgrades by two credit agencies.
Xerox (XRX) shares closed Dec. 30 at $8.73 and were adjusted to $5.75 after Xerox spun off Conduent Inc. (CNDT) over the weekend. Its shares jumped about 77 cents Tuesday at the open. Conduent opened at $14.85 and was down roughly 6% early after its CEO Ashok Vemuri rang the opening bell of the New York Stock Exchange.
Meanwhile, Jeff Jacobson takes over as chief executive at Xerox for Ursula Burns. Xerox also received a $1.8 billion cash transfer from Conduent to help pay off roughly $2 billion in debt.
"Today is an historic day for Xerox. The successful completion of the separation sharpens our market focus and commitment to our customers," said Jacobson, in written remarks. "I am confident the transformational actions we are implementing position Xerox for long-term success and unlocks shareholder value."
Xerox now returns fully to its technology and hardware business. The $11 billion business has struggled to turn around several quarters of declining revenues. It operates in a $260 billion industry growing annually in the mid-single digits.
The Norwalk, Conn.-based company has seen annual revenue and net income decline every year going back to at least 2011, dropping roughly $2.5 billion in total revenues from 2011-2015, according to its own reports.
Jacobson has been leading a transformation of that business by shedding jobs and still searching for an additional $1.5 billion in improved operational efficiencies. Jacobson also told The Wall Street Journal that the company probably will eliminate more jobs in the upcoming year as part of that effort.
Under the separation, Xerox shareholders will receive one share of Conduent common stock for five shares of Xerox common stock held at the close of business on Dec. 15, 2016. Conduent takes about $6.7 billion in annual revenue with roughly 93,000 employees with it.
Xerox executives are scheduled to ring the opening bell of New York Stock Exchange on Wednesday. Shares of Xerox spiked after analysts from Credit Suisse and JP Morgan upgraded their views.
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