August 1, 2016
Bloomberg and Reuters both reported on the results, which showed that the costs of splitting the company into Conduent and Xerox – document technology and services businesses respectively – would be “lower than previous estimates”. The second quarter results were said to have “beat[en] analysts’ estimates”, with costs falling by six percent to $4.24 billion (€3.79 billion), and revenue falling 4.4 percent to $4.4 billion (€3.9 billion).
The more positive results allowed shares to rise as much as 3.9 percent, which is “their highest since July 12”, while the OEM added that it is “on track with efforts” to split before the end of the year. The cost of the separation will be around $175 million (€156 million) to $200 million (€179 million) before taxes, lower than the original estimate of $200 million, and Reuters added that the “cost cuts [are] begin[ning] to pay off” for Xerox.
Restructuring and related costs in turn were around $71 million (€63 million) in the quarter, far less than the $100 million (€89 million) estimated earlier this year, while Reuters noted that revenue had fallen for the “sixth straight quarter as corporate customers reduce printing to reduce expenses and consumers shift to mobile devices”. The document technology business, including printers and copiers, fell by nearly seven percent in revenue, but this was less than the 10 to 13 percent in the last four quarters.
Ursula Burns, outgoing CEO of Xerox, commented that “we made a great deal of progress on the company’s new path forward during the second quarter. I am more confident than ever in our ability to create two separate companies. Document technology revenue declines moderated and margin improved, driven by cost and productivity initiatives”.
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