Xerox has reported revenue growth in its first quarter, but only by 2.8% year on year. This has given it an overall revenue of $1.72 billion for the first three months of 2023 compared to $1.67 billion at this point in 2022.
Xerox CEO Steve Bandrowczak says this was a strong performant explaining: “Despite a challenging macroeconomic climate, demand for our equipment and services remains resilient and is supported by service offerings that help our clients migrate current macro headwinds like higher inflation, labour shortages and tighter liquidity conditions. Further the benefits of a more flexible cost base and ongoing operational efficiencies helped drive improvements in profitability in the first quarter.”
The pretax profit for Q1was $85,000 compared to a pretax loss of $89,000 in 2022.
Revenue from equipments sales was $391 million in the quarter, an increase of 24.5% ($314 million), helped by better equipment availability of production print and light production print equipment in the key US and Emea areas. Production equipment, including Baltoro, Iridesse and Versant lines amount to sales of $73 million ($54 million) and a rise to 19% of this revenue from equipment sales. Mid range equipment brought in £252 million ($194 million).
There is further scope for growth as the company says “we are seeing pockets of softer installation activity – often the result of delays in project deployments rather than order reductions.
“This softness, however, is being offset by continued strength in our office print business, particularly for state and local government, education and mid market accounts, as well as strength in our print and digital service offerings.”
The company says that it anticipates growth to be flat for the year or in low single figures at best. Operating income margin will however increase from 4.7% to 5.0-5.5% thanks to the better than expected profitability in the first three months and to ongoing efficiency programmes.
In the quarterly statement the company explains that the donation of its Palo Alto Research Centre will enable Xerox to concentrate on its core businesses, frees Parc to reach its full potential supported by resources from new owner SRI International.
