Xerox Q2 fades slightly on previous year

Services mitigate ongoing decline in hardware sales

Printer vendor Xerox has revised its global earnings expectation for the full 2012 year in its second-quarter results forecast – but still expects to finish the year with operating revenue of $2bn to $2.3bn (£1.3bn to £1.48bn).

"Considering the economic uncertainty, Xerox now expects that revenue from its technology business will continue to be weak, and, as a result, revised its full-year earnings expectations, which are based on continued strong year-over-year revenue growth from services, lower revenue from technology, and the ongoing benefit from operational efficiencies," the vendor said in its statement for the three months ending 30 June 2012.

Net income for the quarter was $309m, down three per cent from the second quarter of 2011's $319m.

Ursula Burns, chief executive officer and chair of Xerox, said the quarter saw total revenue of $5.5bn, up one per cent on the previous quarter after adjustment for currency fluctuations. The services business gained seven per cent in constant-currency revenue terms – mitigating a continuing slowdown in technology sales.

"With more than half our total revenue coming from services, accelerating growth in this segment of our business is a priority," Burns said. "Our second-quarter results reflect solid progress with eight per cent growth from business process outsourcing, nine per cent growth from IT outsourcing and six per cent growth in document outsourcing, all at constant currency."

Europe in particular was still suffering from weak macro-economic conditions, resulting in a four per cent technology revenue decline in constant currency terms globally for the vendor.