Xerox Reports Revenue down 10%

Xerox has released its third quarter (3Q) financial results for the fiscal year 2015, reporting total revenue of US$4.3 billion, down 10% compared to the same period in last year, or 6% in constant currency.

The company’s total adjusted revenue was US$4.4 billion, a decrease of 7% year-over-year (YOY), or 4% in constant currency. The revenue was driven by Document Technology and currency exchange rates. Its operating margin in 3Q decreased 0.9% to 8.7%, compared to the same period in last year. Adjusted gross margin turned out to be 30.9%. Xerox generated US$271 million in cash flow from operations during the third quarter, ending the quarter with a cash balance of $804 million.

The Services Segment generated revenue of US$2.5 billion, which represented 57% of total revenue, consistent with the same period last year. Document Outsourcing revenue increased 3%. The new Services segment has accelerated growth and efficiencies.

Revenue from the company’s Document Technology Segment experienced a decline of 12% YOY, or 9% in constant currency in the third quarter at about $1.8 billion. The decline was mainly due to increased pressures from developing markets.

The company also claims that the Board of Directors authorized a review of its business portfolio and capital allocation options, so as to enhance shareholder value.

Ursula Burns, Xerox Chairman and Chief Executive Officer, said, “Although we already have taken steps to accelerate cost reductions and prioritize investments to drive improved productivity and higher margins, our Board determined that undertaking a comprehensive review of structural options for the company’s portfolio is the right decision at this time.” Burns added, “During the third quarter, the company achieved adjusted earnings in line with our guidance. We continue to focus on strengthening our offering portfolio, improving productivity and targeting our highest-margin segments. We remain focused on serving our clients and leading in the most attractive market segments where we are best positioned to compete and differentiate.”

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