The OEM’s first quarter results saw it declare a six percent fall in revenue, and a 10 percent fall in revenue from its document technology business.
Xerox’s 1Q2015 results included revenue of $4.5 billion (€4.1 billion), down by six percent, while the company’s services and document technology businesses fell by three percent and 10 percent quarter-to-quarter respectively. The services business contributed 56 percent of the total revenue, with $2.5 billion (€2.3 billion), while the document technology business provided $1.8 billion (€1.6 billion).
The document technology business unit saw equipment sales fall by 12 percent year-over-year, which Xerox says “reflects lower sales of entry and production products and overall price declines”, while its annuity revenue fell by 10 percent thanks to a “modest decline in total pages”. Other causes included “continued migration of customers to our partner print services offering” as well as “lower supplies demand and reduced financing revenue”.
The unit’s revenue mix was 57 percent mid-range products, 23 percent high-end products and 20 percent entry-level products. The entry-level segment saw “higher declines in developing markets” which are “more than offsetting the benefits of new product launches”. These included a one percent increase in colour printers; a 30 percent decrease in colour MFPs; and a 22 percent decrease in monochrome MFPs.
On a mid-range basis, there was a one percent decrease in both colour and monochrome machines, which Xerox said was “consistent with recent quarters’. Finally, the high-end segment saw an eight percent increase in colour machines “driven primarily by the new Versant product”, though colour installations fell by 26 percent “due to timing of customer orders and product launches”. A five percent decrease in high-end monochrome machines also “reflects the overall market dynamics”.
For the future, Xerox predicts that “increased currency headwinds, softer signings and acquisition timing [will] impact revenue”, and has adjusted expectations for the year accordingly.
Ursula Burns, Xerox Chairman and CEO, commented: “Our earnings are in line with the guidance we provided. Results in document technology, which included the increased impact from foreign currency, largely met our expectations. Several of our services businesses performed well, but overall services segment results fell short of our expectations, driven by higher implementation costs in certain health enterprise platform accounts.”