Xerox Reveals Revenue Decline

Xerox Reveals Revenue Decline

Xerox announced their financial results for the second quarter of 2015 (2Q 2015). Total revenue was $4.6 billion, down 7% or 3% in constant currency.

In the second quarter revenue from Services business was $2.6 billion, which represented 56% of the total revenue. Compared to the same period last year this declined by 3%, or increased by 1% in constant currency. Revenue from the Document Technology business was $1.9 billion, down 12% compared to 2Q2014, or 7% in constant currency.

The results indicated that the Service margin of 7.5% fell 1%, while the Document Technology margin of 12.1% was down 2.3%. The operating margin of 8.2% was down 1.6% in the second quarter, compared to the same period last year. The gross margin was 31.1%.

Xerox generated $349 million in cash flow during the second quarter, with a total cash balance of $1.6 billion.

Looking from segment performance, equipment sales in the Document Technology segment saw a decline of 10%, due to “lower sales of entry products particularly in Eurasia and other developing market countries”. However, high-end product sales increased, which “partially offset” the declines.

Ursula Burns, Xerox chairman and chief executive officer, commented on the second quarter, “we delivered adjusted earnings in line with our guidance, met our Services and Document Technology margin expectations and delivered solid operating cash flow of $349 million in the quarter”.

During second quarter, Xerox recorded net restructuring and asset impairment charges of $157 million. Net restructuring charges of $11 million included $17 million of severance costs related to headcount reductions of approximately 420 employees worldwide.


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