Xerox's printing business continues slide
- For the quarter ending June 30%3A Revenues of %245.3 billion%2C down %2499 million or 2%25.
- Profits%3A %24272 million%2C down %245 million or 2%25.
- Stock%3A Closed Friday at %2413.15%2C up 31 cents or 2.4%25.
Print isn't dead, by any means. But at Xerox Corp., it's not all hale and hearty, either.
The Connecticut-based printing and business process outsourcing giant announced its latest quarterly earnings Friday. And the three months ending June 30 marked the ninth straight quarter of year-over-year declines in revenues, with the same pattern again and again — Xerox's services business growing, but not enough to offset the declines in its printing-related work.
Xerox CEO Ursula Burns said the business services business' profit margins were hurt somewhat by costs in the work it is doing in government health care, particularly related to the state of Nevada deciding in May to fire Xerox as the operator of its state health insurance exchange.
"There are bright spots and positive trends, but we still have work — more work to do," Burns told Wall Street analysts in a conference call Friday.
Chief Financial Officer Kathryn Mikells told analysts that the company expects to see government health-care-related bookings up in the second half of the year. That could include a particularly large, $500 million contract to run New York's Medicaid system — that contract still is receiving state approvals.
For the quarter, Xerox had revenues of $5.3 billion, 2 percent less than the same three months a year earlier. While the company's business process outsourcing arm was up 2 percent, and today accounts for 57 cents of every dollar the company takes in, its Document Technology arm was down 6 percent.
After expenses, Xerox had profits of $272 million or 22 cents per share, a decline of $5 million or 2 percent from the same quarter a year earlier.
Wall Street analysts surveyed by Bloomberg had expected, on average, revenues of $5.3 billion and profits of roughly $264 million or 21 cents per share.
The company employs roughly 6,300 in the Rochester area, with its sprawling Webster campus being its biggest manufacturing hub. In the most-recent quarter, equipment sales were down 11 percent, mostly due to lower sales in developing markets, as well as steep price declines.
Among the company's high-end digital printing presses, many of which are made in Webster, installations of color presses were down 28 percent, with growth in its Webster-made iGen line offset by dropping sales of others. Black-and-white systems such as DocuPrint and Nuvera were down 16 percent, continuing what's been a long trend in declining demand for black and white.
Xerox Technology President Jeff Jacobson said in the conference call that Xerox was hurt somewhat by the fact that the second quarter of 2013 saw so much activity related to the launch of new products. Most of this year's new print-related products will be released in the second half of 2014, he said.
Burns said that while revenues related to print are down, it remains a very profitable line of business, helping offset some of the unexpected costs the company is running into in its government health-care business.
During the quarter, the company spent $41 million in severance packages worldwide as it cut roughly 980 workers around the globe. It employs more than 142,000 worldwide.
MDANEMAN@DemocratandChronicle.com