The entrance to Xerox’s site in Wilsonville, Oregon
Xerox announced its second quarter results, delivering Increased cash flow, but records 8.8 percent decrease in revenue for the quarter compared to the same period in the previous year.
Xerox reported total revenues for the quarter of $2.3 billion (€2.06 billion), down 8.8 percent year-on-year which includes a 1.6-percentage point unfavourable impact from currency, and an approximate 0.6-percentage point unfavourable impact from lower OEM sales.
Services, maintenance and rentals revenue which include rental and maintenance revenue (including bundled supplies), as well as the post sale component of the document services revenue from its Services offerings decreased 7.4 percent compared to the second quarter 2018.
Supplies, paper and other sales including unbundled supplies and other sales revenues decreased 12.3 percent compared to second quarter 2018.
Xerox reported that equipment sales revenue decreased 10.2 percent compared to the second quarter 2018, including a 1.2-percentage point unfavourable impact from currency as well as the impact of price declines of approximately 5 percent. The decrease reflected primarily lower sales of ConnectKey devices through its indirect channel in the US for the entry-level models. For the mid-range model the majority of the decline was in North America and also reflected lower activity and a lack of large deals in EMEA. High-end model sales decrease was led by continued lower sales of black and white systems partially offset by higher sales of colour systems associated with continued demand for Xerox’s Iridesse production press and higher installs of its Inkjet cut-sheet systems.
“This quarter we delivered improvements in EPS, adjusted operating margin and free cash flow largely underpinned by our enterprise-wide transformation initiative, Project Own It. These results have enabled us to increase planned investments for the second half of the year to support our revenue roadmap while maintaining our full-year guidance for EPS, adjusted operating margin and free cash flow,” said Xerox Vice Chairman and CEO John Visentin.
The company added: “While this impact gradually mitigated during the quarter, it still remains and we recognize that the implementation of our strategic initiatives to transform the company for long-term sustainability (including offering, go-to-market, sales coverage and cost structure changes) will continue to impact our revenues in the near term.”
As a result, Xerox now expects its revenues to decline approximately six percent for the year, compared to its previous guidance of approximately a five percent decline.
