Xerox makes progress with transformation plan
Wednesday, January 30, 2019
Shares in Xerox jumped by more than 10% after the group posted fourth-quarter profits that beat analysts’ expectations.
The business has instigated a company-wde transformation plan, Project Own It, under fresh chief executive John Visentin, which Xerox said had ramped up in the three months to 31 December 2018.
Xerox’s share price went up by 11.38% to $27.10 (£20.70) after the group posted an increase in adjusted operating profit margins to 16.1% for Q4, and to 12.9% for the full year yesterday (29 January).
Visentin said the results reflected “continued progress” on the strategic initiatives underway to re-energise Xerox’s innovation engine, optimise operations, and boost shareholder returns.
“We remain focused on removing complexity in the way we work, organising more effectively, and creating a better customer experience,” he stated.
However, sales fell by 7.8% year-on-year in Q4, to $2.53bn, while full-year sales were down 4.2% at $9.83bn.
At Xerox’s equipment division, demand for the Iridesse production printer and upgraded Brenva cut-sheet inkjet was not sufficient to mitigate the decline in sales of iGen and Versant printers, alongside a fall in sales of black-and-white printers.
Overall equipment sales fell 9.5% to $629m in Q4, while sales of high-end kit were down nearly 17% at $138m.
The Iridesse prints in up to six-colours, CMYK plus white, gold, silver or clear, and has already found favour with a number of UK customers.
Visentin said the business would update analysts and investors on its strategy and three-year financial expectations at an investor day in the first week of February.
Xerox also turned around last year’s $190m Q4 loss, when it was impacted by US tax changes, and posted net income of $137m.
Separately, Fujifilm said there was no further update regarding about its future intentions following its thwarted takeover deal for Xerox. In an interview with the Nikkei Asian Review at the end of last year, chairman Shigetaka Komori said he hadn’t completely given up on acquiring Xerox, but acknowledged that it would now be “difficult”.
He said relations with Xerox were improving, following last year’s high-profile fall-out and subsequent lawsuits.
In Japan, joint venture Fuji Xerox (in which Xerox has a 25% stake, and Fujifilm 75%) has just announced a new high-speed inkjet web, which borrows some inkjet know-how from the Fujifilm Jet Press 720.
The 11000 Inkjet Press prints at up to 80m/min at 1,200x1,200dpi, and is targeted at commercial printing applications such as direct mail and catalogues.
It is fitted with a new variant of the Fujifilm Dimatix Samba head that has an ink circulation function, and uses a newly-developed pigment ink that includes a fixing agent so pre-coating is not required.
The 11000 will be released to the Japanese market next month, with a European launch date to be confirmed.