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Shares of the company, known for its photocopiers and printers, were up as much as 7%.
Xerox, which has been facing a slowdown in demand as businesses cut down on printing their paperwork, has laid out a three-year cost-cutting plan under Chief Executive Officer John Visentin, a nominee of activist investor Carl Icahn.
In the fourth quarter, Xerox cut expenses by $266 million and said it expects to save another $450 million in 2020. The quarterly results also benefited from a gain of over $500 million related to the sale of a stake in Fuji Xerox and other assets.
That helped the company increase its net income to $818 million, or $3.61 per share, from $137 million, or 56 cents per share, a year earlier. Excluding items, the company earned $1.33 per share, beating the average analyst estimate of $1.11.
Xerox's total revenue fell to $2.44 billion in the fourth quarter from $2.5 billion a year earlier.
Xerox in November launched a bid for HP to drive consolidation in a shrinking market. After getting rebuffed, Xerox has started a proxy fight to take over the board of its target.
Icahn, who owned stakes in both companies, favors a merger between the two companies.