Xerox's new CEO indicates the company is not actively putting itself up for sale
Xerox reported 2nd quarter earnings on Thursday morning, the first earnings report for the new CEO who had something to say about the company’s overall future.
John Visentin was appointed this past Spring, after sweeping management changes pushed by activist investors Carl Icahn and Darwin Deason.
Xerox earlier had scuttled a proposed takeover of the company by Fuji, although there had been talk the company might still consider other suitors.
However, in this 2nd quarter report, Visentin indicates the company is not conducting an auction process, where other firms could consider making a bid for Xerox.
“While there has been much speculation about Xerox, I want to be clear. My mission is to do what is right for Xerox. Our focus is on leveraging the assets and capabilities we have today to create a sustainable company that provides a compelling value proposition for customers and partners,” Visentin said in the 2nd quarter statement.
During a conference call with investors, Vistentin also talked about taking better advantage of the technology it is developing in places like Webster, and at the PARC facility in California.
Visentin says what he’s focused on now is taking advantage of Xerox’s technological capabilities, pointing to research at the company’s Palo Alto facility in California, as well as its Rochester area operations.
“I conducted reviews in PARC and in our operation in Webster, New York, and was impressed by what I saw. We have valuable and differentiated offerings that are underutilized as well as some new technologies; work that’s underway in our labs that has the potential to disrupt industries."
Visentin also said on the call that while Xerox is not conducting an auction to look for a potential buyer, if a company interested in Xerox makes a proposal, the Board of Directors has the responsibility to look at such an offer.
As far as the 2nd quarter numbers go, Xerox saw profits come in a bit less than Wall Street analysts expected, and while sales were down slightly, the numbers were a little better than analyst estimates.
The company earned $112 million in the quarter compared to $116 million last year at this time. Xerox earned .42 a share.
Revenues totaled $2.51 billion, down 2.2% compared to a year ago.
George Conboy is chairman of Brighton Securities. He says the profit drop is somewhat disappointing.
“What we’re seeing, is some of what we’ve seen for a long time, that is, sales are flat to down, unfortunately it looks like profits are also down a little bit more than expected, and that’s a change from long time past where profits have been reasonably stable.”
Xerox also announced it will buy back up to $1 billion of its own stock, with up to $500 million of that happening this year.
The new CEO says that is a strong endorsement of the company and an effort to deliver value to shareholders.