Xerox Sees Decline in Document Technology Business Revenue

Xerox Sees Decline in Document Technology Business Revenue

Xerox has reported its earnings for the second-quarter of 2014. In that period, total revenue of $5.3 billion was down 2% or 3% in constant currency.

Revenues from the company‘s Services business, were $3.0 billion, represented 57% of that total; this is up 2% year-over-year, or 1% in constant dollars. Xerox forecasts that its Service revenue will increase to about two-thirds (67%) of its total revenue by 2017.

Revenue from the company’s Document Technology Business, which captured 40% of total revenue, was $2.1 billion, down 6% or 7% in constant dollars. According to Xerox’s earning conference call transcript on Seeking Alpha, “This was higher than last quarter’s rate of decline and as we highlighted during our first quarter earnings call, this was anticipated given the timing of last year’s product launches. That impact drove the higher rate of decline for equipment revenue with annuity revenue showing a consistent 4% decline in both quarters.” said Kathy Mikells, Executive Vice President and CFO.

In addition, Ms. Mikells said, “The timing of this year’s product launches are more back half weighted, which we believe will position us well later in the second half and into 2015. Planned launches include the recently announced Versant’s entry production color product, extension of our ConnectKey® plat- form within our mid-range portfolio and into entry as well as a refresh of the number of entry desktop products.”

According to the firm’s 2Q2014 earnings presentation (shown below), only the sales of color entry-level printers saw growth in the quarter, with an increase of 5%.

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