Xerox has increased sales by 22% in Q2 leading the company to revise its full years forecasts. The increase in revenue to $1.92 billion ($1.58 billion) was almost entirely due to the acquisition of Lexmark last year. This has boosted the Xerox offer at the desktop and entry level where equipment sales more than doubled to £140 million ($63 million). As revenues from equipment installations in both mid range and high end segments fell, the growth in A4 printers was welcome.
Equipment revenue in the mid range fell to $162 million ($181 million) for the quarter, which high end equipment sales drops from $87 million to $82 million. Xerox will be hoping this increases as its spate of product announcements earlier this year start to ship in quantity as well as the arrival of machines still in development.
This includes a new Iridesse, an SRA3 inkjet press and a continuous feed inkjet press. The latter is not going to arrive for another 12 months. In the meantime the company has two Proficio models to sell at the high end.
While the equipment sales remain subdued, revenue from paper, supplies and other consumables rose sharply. The volume of pages printed was 1% on this time last year. This was a marked improvement on the previous quarter where page volumes had fallen 6%.
Chief executive Louie Pastor says: “Our second-quarter results gave us another reason for confidence. We made progress on each of our three strategic priorities: stabilising revenue, increasing profitability, and reducing leverage.
“As a result, we are raising both revenue and adjusted operating income guidance, as well as our Lexmark gross synergy targets. While we have more to prove, I like how our team is showing up and executing with urgency and discipline.”
The optimism is built on the future sales pipeline which is running ahead of 2025 in both print and IT solutions operations. Consequently Xerox expects full-year sales to reach €7.6 billion, up from €7.5 billion, and operating profit to be in the range of $535-605 million, up from earlier guidance of $450-500 million.
The results will boost confidence at Starteepo, the Czech investment group that has been buying Xerox shares to build a stake of 6.12% ahead of Q2 results saying it wishes to “remain a constructive long term shareholder”.
