Xerox boosts Q1 profits despite sales downturn

Xerox cited weakness in its Document Technology business for a 2.7% year-on-year decline in Q1 sales to US$5.4 billion.

However, the US-based company boosted first quarter net income by 10% to US$296 million ($289 million).

Chief executive Ursula Burns has been pushing Xerox to transition from its traditional print and equipment business into business services, which is expected to provide 66% of revenues by 2017.

"During the first quarter, we delivered results in our Services business that align with our growth strategy and our expectations," she said.

"However, we fell short in our Document Technology business, which put pressure on our overall results."

Document Technology includes the iGen commercial press line.

[Review: Xerox iGen4 EXP]

Burns did tout the introduction of ConnectKey, a software system for Xerox multifunction printers, which began shipping in Q1.

"For the balance of 2013, here's what will contribute to revenue improvement: a full launch of ConnectKey; new high-end colour systems, including advanced iGen presses and the addition of Impika inkjet printers; and expanded coverage of SMB through our global imaging distributors and through additional indirect channel partners."

Burns also said Xerox was focused on reducing costs. "We're making progress in taking costs out of a legacy infrastructure, but we need to accelerate this progress, especially in Europe," she said.

She added that companies were holding back from investing in new equipment and services due to the weak global economy.

"We saw that in our Document Technology business primarily. From a geographic perspective, Europe remains weak. And in the first quarter, it had some shocks that weakened it even further," she said.

"And we did see a slowdown, a bit of slowdown in some developing market economies. The US remains stable but weak. I mean, we have not seen a pickup in the US."

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This article originally appeared at printweek.com