Disciplined cost management and strong sales of colour systems and office digital products combined to result in Xerox reporting a higher than expected fourth quarter profit. However, revenue for the fourth quarter was flat at around US$4.3bn, a 1pc increase, due to declining post-sale revenues on the company’s older light lens technology and exit from the SoHo market.
The company, which employs over 2,000 people in Ireland, reported fourth-quarter 2003 earnings per share of 22 cents including a 3-cent positive effect from a reduced litigation reserve.
Equipment sales grew 11pc in the fourth quarter including a currency benefit of 7pc. About 60pc of all equipment sales in the quarter were generated from products launched in the past two years, reflecting a strong return on investment.
Total revenue for the fourth quarter was US$4.3bn, an increase of 1pc from the fourth quarter of 2002 including a currency benefit of 6 percentage points. Revenue growth was adversely affected by declining post-sale revenue from the company’s older light lens technology and its exit in 2001 from the small office/home office business.
Total fourth-quarter revenue from the company’s targeted growth areas – office digital, production digital and value-added services – grew 10pc year over year and now represent about 73pc of the company’s revenue. Xerox also noted significant progress in its developing markets operations, which delivered total revenue growth of 1pc in the quarter and 21pc equipment sales growth.
Revenue from colour products grew 20pc in the fourth quarter and is a key driver of Xerox’s growth strategy as the increasing volume of pages printed on Xerox’s colour systems flows through to post-sale revenue.
“Xerox is operating on full throttle with winning results,” said Anne M. Mulcahy, Xerox chairman and chief executive officer. “Our 2003 performance – capped by a successful fourth quarter – is proof positive that the Xerox value proposition is clicking with customers and that our strengthened operations are delivering sustainable benefits.”
According to research from industry analyst and market sizing company InfoSource, Xerox has now acquired over 80pc of the high print production market in Ireland. The company’s unit growth for the professional digital colour market in Ireland increased 60pc since the first quarter of 2002, according to InfoSource.
By John Kennedy