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News Release from: Xerox
Edited by the Printingtalk Editorial
Team on 30 July 2004
Xerox Second Quarter Shows Continued
Growth
Xerox Corporation has announced second-quarter earnings of 21 cents per share that reflect continuing success in the company's operational performance.
Xerox Corporation has announced second-quarter earnings of 21 cents per share that reflect continuing success in the company's operational performance Services-led offerings for large enterprises generated major wins in the quarter while continued strength in colour technology and monochrome light production systems contributed to equipment sales growth
This article was originally published on Printingtalk on 18 Mar 2003 at 8.00am (UK)
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The company also said it is raising its full-year earnings expectations.
"Market demand for new systems and specialised services as well as a clear focus on providing smart document management for businesses small to large - all delivered through a flexible cash-generating business model - resulted in another quarter of earnings that exceeded our expectations," said Anne M.
Mulcahy, Xerox chairman and chief executive officer.
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"This earnings performance and strong demand for Xerox's new technology and value-added services give us the confidence to raise our full-year earnings expectations to 80-84 cents per share, up from earlier expectations of 67-72 cents per share," she added.
The increase includes the eight-cent gain from the sale in the first quarter of Xerox's ownership in Contentguard, which will be partially offset by an incremental marketing and restructuring investment of four cents per share expected during the balance of the year.
With technology investments fuelling equipment sales, the company said that about two-thirds of all equipment sales in the second quarter came from products launched in the past two years.
Equipment sales grew about five per cent in the second quarter and total revenue was $3.9 billion, down two per cent from the second quarter of last year.
Both equipment sales and total revenue included a currency benefit of two percentage points.
Revenue growth continued to be affected by post-sale revenue declines from the company's older light-lens technology.
In addition, weak performance in Latin America significantly affected post-sale and total revenue.
Second-quarter revenue from the company's targeted growth areas - office digital, production digital and value-added services - grew four per cent year over the year and now represents about 73 per cent of the company's revenue.
Revenue from colour products grew 17 per cent in the second quarter and is a key driver of Xerox's growth strategy as the increasing volume of pages printed on Xerox's colour systems flows through to post-sale revenue.
Colour revenue now represents 25 per cent of Xerox's total revenue.
Xerox said it believes it is making a powerful impact with services for large companies like implementing e-learning programs for a global workforce, deploying Xerox's proprietary Docushare software for web-based editing and archiving of critical corporate documents and applying Lean Six Sigma tools to reduce customers' overall document spend by an average of 30 per cent.
The growing base of customers that have engaged Xerox for consulting, imaging and content management contributed to a significant increase in revenue generated from value-added services.
Through the company's production business, Xerox said it continues to lead the 'new business of printing' by helping commercial printers and document-intensive industries make the transition from offset to the more dynamic world of digital.
Xerox announced at Drupa seven new digital systems with an expanded suite of services and workflow tools that drive profit for customers as well as Xerox.
Production colour installations grew 17 per cent in the quarter largely due to the Xerox iGen3 digital colour production press and Docucolor 5252 digital colour systems.
Installations of production monochrome products increased 13 per cent primarily driven by demand for the company's Nuvera 100 and 120 copier and printer and the Xerox 2101 light production system.
Selling, administrative and general expenses were down four per cent in the second quarter to 27.3 per cent of revenue.
Gross margins of 41.3 per cent improved sequentially and are in line with the company's full-year expectations.
Xerox generated operating cash flow of $256 million after contributing $232 million to pension plans.
Commenting on the third quarter, Mulcahy said she expected earnings in the range of 11-15 cents per share, citing continued equipment sale growth and increased revenue in key markets.
She added: "While maintaining our disciplined approach to managing costs, we will continue to compete aggressively with new systems and services that solidify Xerox's position as the leader in document management, delivering another quarter of improved earnings performance.".
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