06 August 2017 Business

Xerox on course as high end press sales fall

A rise in inkjet sales could not balance out a fall in sales of other high end presses as Xerox posts decline in sales with rise in profits.

Production colour remains a key growth opportunity for Xerox despite a 9% fall in installations of such printers in the second quarter of the year.

Mid range colour fell back 15% in terms of machines installed while office colour, where the company launched a slew of new machines in the spring, chalked a 24% sales increase over 2016. High end mono was the worst performer falling 34% compared to a year earlier.

This was partly due to prior year sales boosted by Drupa, Xerox explains, as well as market wide transition away from mono only printing. The fall in high end colour equipment sales is partly explained by timing and delays in bringing the new Versant 180 to market. On the other hand, the company says that sales of inkjet colour presses increased. There was also a decline in iGen sales and older models.

In terms of revenue generated, high end equipment produced $106 million in sales during the quarter, a 15.9% fall over Q2 2016, 13.9% excluding the effects of currency fluctuations. This is 20% of the equipment revenue slice, while mid range colour accounts for 63% of equipment revenues.

Overall revenue for Xerox fell 8.1% in Q2 to $2.57 billion, with net profit rising to $166 million ($158 million). The result remains in line with expectations, says CEO Jeff Jacobson. “We are pleased with the strong operating margins and cashflow we delivered, as well as the continued progress on our Strategic Transformation initiatives.

“This resulted in solid operating results despite revenue declines, which were driven by lower equipment sales as we transition to the recently launched ConnectKey portfolio. The new product line-up has been met with enthusiasm by customers, partners and industry experts, fuelling our confidence in improving revenue trends later this year and into next.”

US investors liked the increase in profit if not the fall in revenue pushing the shares up 5.8% on the news.

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Inkjet in action

Inkjet in action

Increased sales of continuous feed inkjet presses could not compensate for a fall in sales of iGen and older digital machines as sales of high volume machines dipped in the Q2 results. Profits increased despite the slide in revenue.

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