Xerox Discusses First-Quarter Results, Lay-Offs, 3D Printing

During a conference call yesterday with investors and analysts, Xerox CEO and Vice Chairman John Visentin discussed the company’s first-quarter 2019 financial results and key initiatives.

Visentin noted Xerox’s improved operating margin for the first quarter: adjusted operating margin was 11.3 percent, up 140 basis points year-over year.

Visentin noted that, while revenue was down 9.4 percent year-over-year for the first quarter, earnings per share (EPS) was $0.55, up $0.47 year-over-year.

The Xerox CEO noted that, in the first quarter, Xerox “accelerated building a more efficient shared services operation, which we anticipate will deliver at least $90 million in savings this year, while making it easier for clients to do business with us.”

Xerox also began work on an “automation center of excellence and implementing rule-based robotic process automation across many of our repeatable work streams such as invoice processing.”

By automating invoice processing, Visentin says Xerox can increase accuracy, reduce processing time, and improve client satisfaction, all while reducing costs.

Real-Estate Consolidation

The rationalization of Xerox’s real-estate portfolio is another area where Xerox is said to have made significant progress

Xerox consolidated 83 percent of its targeted sites, which it says has enabled employees to co-locate and increase collaboration while Xerox reduces  costs.

Overall, regarding revenue growth, however, Visentin said it will take will take time for Xerox change its declining revenue-growth trend.

Visentin noted that in the first quarter, Xerox is beginning to see growth with its A4 segment. During the fourth quarter, A4 color installations were up 10 percent year-over-year, and were the only segment that saw year-over-year installation growth.

To help support growing both its A4 and A3 placements, Xerox is investing in programs that target competitive equipment and expand Xerox’s distribution channels. In the high-end category, Xerox is now “nearly flat with continued momentum from the Iridesse production press.”

Vistentin also noted that while Xerox is considering selling its financing business, this is not definite and may not occur.

3D Printing

Xerox reported that it’s now integrated Vader Systems, a small liquid-metal 3D printer manufacturer, into its R&D organization. By pairing Xerox’s expertise with Vader’s IP, Xerox is now looking to apply this technology to a broader set of materials while lowering the run-rate costs for clients.

Next month, Xerox will be exhibiting its 3D-printing capabilities for the first time at RAPID + TCT, one of the largest additive-manufacturing trade shows in North America. Visentin also noted that with 3D printing, “We are actively identifying strategic partnerships and additional early customer adopters for our additive-manufacturing initiatives.”

Job Cuts

During the quarter, there were some 400 layoffs at Xerox, while leaving about another 1,100 jobs unfilled.

The reductions took Xerox’s workforce to 30,900 people by the end of March 2019. As of 2013, that workforce totaled some 140,000 people.

CFO Bill Osbourn Jr. commented: “We optimized our workforce, and while we don’t ever want to minimize the risk of disruption that’s created by all these changes, … in each case we made these changes because we know what’s best for Xerox in the long-term.“I personally met with over 300 of our managers, and I can tell you that while there was some disruption, they are all excited about the future because we are investing in the long-term.”

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