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Xerox's 2nd Quarter: Profits Improve; Sales Lagging

Jul 29, 2016

Xerox is reporting 2nd quarter numbers which show an increase in profits and a decline in sales .

Xerox earned $155 million in the quarter, and excluding certain one-time costs, saw earnings per share of 30 cents, several cents better than Wall Street had expected.

Sales overall were down four percent compared to a year ago, totaling $4.4 billion, about what analysts anticipated.

“We delivered strong second-quarter results reflecting significant progress across our 2016 priorities: delivering on our financial commitments, executing our separation and driving our strategic transformation,” said Ursula Burns, Xerox chairman and chief executive officer. “Our Services segment delivered substantial margin expansion and continued revenue growth in Document Outsourcing. Document Technology revenue declines moderated and margin improved driven by cost and productivity initiatives.”

At Brighton Securities, Chairman George Conboy says the quarter was so-so, with earnings showing improvement, but revenues still lagging.

“Profits were OK, a little higher than expected, it’s great that Xerox is profitable. Unfortunately, as expected, sales were down in the services unit and they were down even more in what we’ve been called doc-tech, which is the traditional copier unit.”

Xerox also continues with its ongoing restructuring efforts. Worldwide employment as of the end of June was at 131,800, down by 11,800 from last December, primarily due to seasonal reductions as well as cost cutting efforts.

In terms of Xerox's employment in the Rochester area, about 6,200 people were employed at the end of the second quarter, down 400 from a year ago. The company has said in the past that number tends to fluctuate with reductions in some departments as well as hiring going on in other areas.