Xerox is reporting second quarter profit and sales numbers that have declined from last year at this time. But the results did not come as a big surprise.
The company saw just $12 million in net profits, compared to $266 million a year ago.
The big drop was largely due to the recent announcement that Xerox is exiting some parts of its government healthcare business, although it is very involved in other aspects of that business.
Earnings per share of .22 cents met expectations. Sales overall were down 7 percent, due in part to currency fluctuations. The total revenues of $4.59 billion came in a little less than Wall Street estimates.
CEO Ursula Burns says the company is focuses on improving the profit margin in the services business and will take some restructuring actions. There's no word yet what that will mean in terms of layoffs, but spokesperson Karen Arena indicates that move is not likely to have a major impact in Rochester.
"That restructuring charge will be mainly concentrated in the services business for the company and as you know a lot of the Rochester base is part of the printing and technology business.”
At Brighton Securities, George Conboy says Xerox is still facing challenges in generating more sales in the services business.
"Not only is Xerox not making up for the decline in the copier business with the service business, but the profit margins on the service business side have declined, suggesting they're facing stiff competition in that business.”
The services business now makes up more than half of Xerox's overall revenues.
