COMPETITIVE ALERT..........."Xerox Reports 4Q and 2009 Earnings"
2009 Full-Year Results
Xerox reported corporate revenues of $15.2 billion for 2009, down 14% from $17.6 billion in 2008.
Equipment sales declined by 24% to $3.6 billion from $4.7 billion in 2008.
Post-sale revenue declined by 10% to $11.6 billion from $12.9 billion last year.
Net income for 2009 more than doubled from 2008, to $485 million from $230 million, largely due to cost and expense management.
4th Quarter Results
Total revenue for the 4th quarter was down 3% from 4Q '08 to $4.2 billion which is a sign of improvement from previous YoY quarterly declines.
Post-sale revenue was flat year-over-year.
Equipment sales were down 11%, but increased 40% from the 3rd quarter, well above normal seasonality.
Earnings for the quarter increased to $180 million from $1 million last year.
Comments by Ursula Burns - Xerox Corporation - CEO
Xerox has not seen not seen a "significant or consistent shift towards increased spending on document technology in the US and Europe, especially in large enterprises."
Xerox expects revenue to be "under pressure until there is a more sustainable recovery". This will likely drive further cost reductions.
However, they do see strength in services signings, MPS, and their channel businesses. Color is "trending better" in high-end printing (with the 7002 and 8002) and in the office (with the ColorQube).
B&W high-end production printing is "under pressure across the board".
Pricing has been lower by 5-10% in 2009, but the company believes prices have been "stable" throughout the recession.
Xerox plans on reducing its work force by 4% which is about 2500 employees. Cuts are expected in manufacturing/supply chain, technical services and back-office functions in areas where they have improved efficiencies.
The ACS acquisition will be completed next month at a shareholders meeting. The ACS integration is being managed by 4 teams, which are delivery and infrastructure, corporate governance, sales and innovation. The innovation team, is testing Xerox technology for use in automating ACS manual work processes.
Expectations are that revenues will grow in 2010 (for Xerox in constant currency) towards the end of the year with a modest economic recovery.
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