Financial analysts believe Xerox should “replace” CEO

December 31, 2012

Analysts at Seeking Alpha claim Ursula Burns’ tenure has seen shares decline by 57 percent, and “question whether [it] has the right management team”.

The site started analysing Xerox’s stock performance in January 2012, and notes that investor enthusiasm had increased due to stock purchases that month by a hedge fund. In the months since it has analysed results and discusses why it thinks investing in the company might be a “value trap”, following an earlier article on the advantages of investing.

Seeking Alpha contends that Xerox CEO Ursula Burns, who has held the position since April 2007, has presided over a 57 percent decline in share prices, and notes that it disagrees with other analysts that Burns is a “tough, no-nonsense CEO”, claiming rather that “it’s appropriate to consider the poor results” seen under Burn’s tenure in charge.

Among the damning statistics include the fact that the OEM’s year-over-year revenue growth has never reached over three percent since 2010, as well as a 10 percent revenue decline in its products and supplies services, and its guidance prices for shares for 2013 are three percent lower than those it suggested one year ago.

The analysts’ guidance includes the stark belief that “covering the company is comparable to water torture”, because the OEM has been “steadily reporting” stock buying guidance that is both “soft and sour” in an attempt to meet targets as well as boost poor figures. In turn, their belief is that “one thing Xerox needs to do in order to enable it to unlock shareholder value is replace Ursula Burns with an executive who knows what he or she is doing.

“Although we are pleased to see Xerox make overtures to shareholders by increasing the dividend and share repurchase authorization, we are getting irritated with the sour notes that we’ve been hearing from management and we question whether Xerox has the right management team to enable it to unlock shareholder value”.

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