Xerox delivered the financial results for its fourth quarter and therefore the full year results for 2015. This makes for grim reading and it’s immediately obvious why Xerox has opted to split itself into two halves.
Revenues overall for the fourth quarter were $4.7 billion, down 8 percent or 5 percent in constant currency year-over-year. Annuity revenue was 83 percent of total revenue. The operating margin fell 1.2 percent from the same quarter a year ago to 9.2 percent. Gross margin was 31.3 percent, and selling, administrative and general expenses were 19.0 percent of revenue.
Revenue for the Document Technology half of the company fell a whopping 13 percent, or 10 percent in constant currency terms, to $1.9 billion. The services segment fared better at $2.6 billion, down 3 percent or flat in constant currency over last year. This represented 57 percent of total revenue,
However, Xerox generated $878 million in cash flow from operations during the fourth quarter and ended 2015 with a cash balance of $1.4 billion.
The full year figures show overall sales down 10 percent from 2014, from $5,288m to $4,748m. Total revenues have fallen eight percent, from $19,540 to $18.045. Net income fell 52 percent from $1,013m to $488m, while income before taxes fell 66 percent from $1,206m to $412m.
In terms of print engines, Xerox suffered an eight percent drop in sales of high-end colour systems, and a 10 percent drop in high-end monochrome systems. The mid-range installs were flat for colour devices, with a 16 percent fall in monochrome printers. The entry-level market saw a 49 percent drop in colour printers, which was offset by a 63 percent rise in the number of colour multifunction devices, and a three percent drop in monochrome devices.
Clearly, Xerox is hoping to improve on these results by freeing each half of the company to pursue its own goals. But it’s equally clear that the future growth is likely to come from the services side, though Xerox is promising to unveil new printers at this year’s Drupa show.