Xerox sees sales slide but profits grow in Q1
Wednesday, April 21, 2021
Xerox’s sales fell year-on-year in Q1, due to the continued impact of the coronavirus pandemic, but profits crept up.
The company recorded revenue of $1.71bn (£1.23bn) in the three months ended 31 March 2020, down 8.1% from $1.86bn a year ago, or by 10.4% on a constant currency basis.
Its operating profits were up slightly by 2.3% from $87m to £89m, while it posted a pre-tax profit of $53m, having suffered a pre-tax loss of $5m in the same period last year.
The manufacturer said business was still being impacted by Covid-19 and that recovery in the near-term “may be uneven and affected by the emergence of new variants of the virus and the resurgence of elevated Covid-19 cases in various countries and regions”.
However, it said it saw a gradual recovery of its revenues as businesses gained confidence in the progress to control the pandemic.
“We saw a positive correlation between the roll-out of vaccinations, the return of employees to the office, and the gradual recovery of our page-volume driven post sale revenues,” the business stated.
“We expect that measures to control the pandemic and expand economic activity will result in a moderate economic improvement in 2021.
“We also expect to continue our actions to mitigate the effects of the pandemic on our business operations and financial performance, and we have a strong balance sheet and sufficient liquidity, including access to our undrawn $1.8bn revolver.”
Xerox also said it had recognised savings of around $10m in Q1 from the use of various temporary government aid schemes in the US, Canada and Europe designed to support businesses through the pandemic.
Xerox vice chairman and CEO John Visentin said: “In the first quarter, in an environment where many offices remained closed, we grew equipment sales and IT Services revenue year-over-year. I am proud of how our employees have continued to deliver for our customers during the pandemic.
“We made progress toward standing up XFS, Xerox Software and PARC Innovation as separate businesses, which we now expect to complete in calendar year 2021.”
He added: “With small and medium-sized business and enterprise clients planning to return more employees to the office, our differentiated offerings are well-positioned to serve their growing needs. The strength of our performance, portfolio and strategy gives us confidence we will return Xerox to growth in 2021.”
Xerox’s share price closed at $23.71 yesterday (20 April) following the release of the results, down 6.36% on Monday’s close.