Xerox Reports Q2 Declined Profit, Increased Earnings
Jul 25, 2006
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Business appliance maker Xerox Corporation reported second-quarter total revenue increased 1 percent to U.S. $4 billion, or $0.26 earnings per share. Despite the slight increase, net income decreased a staggering 40 percent to $260 million, compared to $423 million in the prior-year period.
Anne M. Mulcahy, Xerox chairman and CEO, said, "Revenue is up -- the benefit of increasing install rates of Xerox digital and color systems as well as continued demand for our document management services, all of which fuels our healthy annuity stream. Through a disciplined focus on costs and operational improvements, we increased gross margins and delivered solid bottom-line results."
Post-sale and financing revenue, which represents about 75 percent of Xerox's total revenue, increased 2 percent, largely driven by 4 percent post-sale growth from digital systems.
Xerox's strategy to boost revenue through annuity from color products and services contracts also contributed to post-sale growth with a 16-percent increase in color post-sale revenue and 5 percent post-sale growth from global services. Signings for document management services were up more than 15 percent in the quarter.
Revenue from Xerox's color systems grew 14 percent in the second quarter and now represents 34 percent of total revenue.
Xerox expects third-quarter 2006 earnings in the range of $0.20 to $0.22 per share.
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