Tags: Xerox | business | services | XRX

Xerox Widens Into Business Services

By    |   Friday, 14 Oct 2011 03:19 PM

This isn’t your father’s Xerox (XRX). The company has abandoned its origins as a copy machine maker. And while its focus remains on printing, Xerox has broadened its reach to include a variety of technology and business services.

That expansion was buoyed by the company’s purchase of Affiliated Computer Services (ACS) for $6.4 billion last year. Handling back office operations accounts for about two-thirds of ACS’ revenue. The rest comes from providing information technology services.

Xerox’ own revenue now comes half from technology and half from services. Printing products, including printers, copiers, toners, and ink, are counted as part of the technology segment.

In light of the substantial shrinkage of the market for printing by individuals in recent years, Xerox now focuses on businesses. The company is poised to benefit from the shift to digital from analog printers and an increase in demand for color printing.

Xerox’ profit soared 41 percent in the second quarter to $319 million from $227 million a year earlier. Revenue climbed 2 percent to $5.6 billion. Xerox plans to buy back about $700 million worth of stock in the second half of the year

Recovery

Standard & Poor’s analyst Thomas Smith has a five-star buy rating for Xerox shares. “We believe XRX is recovering from a cyclical slowdown in demand for printers and is benefiting from having more service offerings as a result of the ACS acquisition,” he writes.

“We foresee more stability in overall results, as well as opportunities for new sales to an expanded customer base. We think XRX is realizing some of the potential savings from several rounds of restructuring and from sales of new color printing products.”

The company next reports Oct. 25.

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This isn t your father s Xerox (XRX). The company has abandoned its origins as a copy machine maker. And while its focus remains on printing, Xerox has broadened its reach to include a variety of technology and business services. That expansion was buoyed by the company s...
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Friday, 14 Oct 2011 03:19 PM
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