Anne Mulcahy, Xerox CEO, says, “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.
“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 US67-72c per share,” she added. The increase includes the US8c gain from the sale in the first quarter of Xerox’s ownership position in ContentGuard, which will be partially offset by an incremental marketing and restructuring investment of 4 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 US$3.9bn, 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 impacted by post-sale revenue declines from the company’s older light-lens technology. In addition, weak performance in Latin America significantly impacted 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 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.
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