Blaming delayed decisions in enterprise spending on office equipment and distributors holding lower inventory levels, Xerox Friday reported an 18 percent drop in first-quarter revenue.
The Stamford, Conn.-based company said equipment sales fell 30 percent in the quarter, driven by lower activity, especially through the channel. "While Xerox remains the prominent player in our industry with No. 1 revenue share, we expect that enterprise spending on technology will continue to decline this year," said Anne Mulcahy, Xerox chairman and CEO, in a statement.
For the quarter ended March 31, Xerox reported total revenue of $3.6 billion, down 18 percent from $4.3 billion in the same period last year. Xerox, nevertheless, managed to turn a profit in the quarter, reporting net income of $42 million or 5 cents a share, compared with a loss of $244 million or 27 cents a share one year ago.
"Our road map in this recession is focused on cost and expense management, cash generation and continuing to strengthen our No. 1 revenue share position through innovation and services," Mulcahy said.
Post-sale and financing revenue declined 14 percent, the former driven by lower supplies and paper sales.
In an effort to turn sales around, Xerox said it would continue to bring additional products to market.
"During the year, we will continue to bring new technology to market that provides more affordable choices for our customers and launch more document services that help our customers cut their document costs by up to 30 percent," Mulcahy said.
Xerox forecasted that it would deliver second-quarter 2009 earnings in the range of 10 cents to 12 cents per share, and full-year 2009 earnings of 50 cents to 55 cents per share, falling below analyst expectations.