Xerox Fails To Reproduce
Xerox Corporation (NYSE:XRX) has come in for a lot of praise recently, even being called the greatest turnaround since Chrysler.
Maybe that's a stretch.
Revenue for Q1 06 dropped slightly from $3.771 billion last year to $3.695 billion. Operating profit fell from $210 million to $200 million. Not all the news was bad. "Our steady improvement in post-sale revenue shows that Xerox's business model is working. We also delivered solid product install growth, a more than 25 percent increase in signings for document management services, and 11 percent growth in revenue from Xerox digital color systems," said Anne M. Mulcahy, Xerox chairman and chief executive officer. Since the company has been focusing on the sales of these systems for the past several years, this actually appears to be part of a long term positive trend. But unit sales for some products did drop.
It is a bit hard to swallow Xerox as a real turnaround story. Revenue has been flat for three years at about $15.7 billion a year. The final quarter of last year was strong with revenue of $4.25 billion and net income of $282 million. But, now the company is faced with the issue of whether the next quarter or two will be much better than the Q1 disappointment.
If the answer to the question is "no", then Xerox's stock has little room to run. The share price has traded in a range of $12.40 to $15.78 over the last 52-weeks and now sits at $14 with little excuse to move much one way or the other.
Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He is also the former president of Switchboard.com, which was the 10th most visited site in the world at the time, according to MediaMetrix. He has been chief executive of FutureSource LLC and On2 Technologies, Inc. and has served on the boards of TheStreet.com and Edgar Online. He does not own securities in companies he writes about. He can be reached at douglasamcintyre@gmail.com.
Xerox Corporation (NYSE:XRX) has come in for a lot of praise recently, even being called the greatest turnaround since Chrysler.
Maybe that's a stretch.
Revenue for Q1 06 dropped slightly from $3.771 billion last year to $3.695 billion. Operating profit fell from $210 million to $200 million. Not all the news was bad. "Our steady improvement in post-sale revenue shows that Xerox's business model is working. We also delivered solid product install growth, a more than 25 percent increase in signings for document management services, and 11 percent growth in revenue from Xerox digital color systems," said Anne M. Mulcahy, Xerox chairman and chief executive officer. Since the company has been focusing on the sales of these systems for the past several years, this actually appears to be part of a long term positive trend. But unit sales for some products did drop.
It is a bit hard to swallow Xerox as a real turnaround story. Revenue has been flat for three years at about $15.7 billion a year. The final quarter of last year was strong with revenue of $4.25 billion and net income of $282 million. But, now the company is faced with the issue of whether the next quarter or two will be much better than the Q1 disappointment.
If the answer to the question is "no", then Xerox's stock has little room to run. The share price has traded in a range of $12.40 to $15.78 over the last 52-weeks and now sits at $14 with little excuse to move much one way or the other.
Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He is also the former president of Switchboard.com, which was the 10th most visited site in the world at the time, according to MediaMetrix. He has been chief executive of FutureSource LLC and On2 Technologies, Inc. and has served on the boards of TheStreet.com and Edgar Online. He does not own securities in companies he writes about. He can be reached at douglasamcintyre@gmail.com.
posted by douglas mcintyre at 6:45 PM
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