According to the company, revenue from colour grew 13% and now represents 40% of Xerox's total revenue – up 3% from the first quarter of 2007. The results were boosted by a 5% growth in installs of production colour products within the DocuColor range.

Xerox now claims to have the largest share of the colour market in the industry, producing more than 40 billion pages last year. In the first quarter, the number of colour pages grew 32%, and now represents 14% of total pages – up 3% from the previous year.

Overall, the company recorded total revenues of €4.4bn (£2.2bn) for the quarter, up 13% from the same quarter in 2006. However, it posted a loss of $244m, compared to a profit of $233m in the previous year, following the out-of-court settlement of a lawsuit.

The lawsuit was relating to charges brought by investors following the US Securities and Exchange Commission ruling over inconsistencies in the company's accounts. Xerox denies any wrongdoing relating to the lawsuit.

Xerox's chief executive Anne Mulcahy said: "We're investing in sales, expanding our distribution and winning in the marketplace through technology and services offered at competitive prices. This quarter we saw our investments flow through to improved install activity – activity that fuels our profitable annuity stream."

Xerox will set out its stall to take a larger share of the digital colour market at this year's Drupa with the launch of its updated iGen3 with more advanced colour management systems (PrintWeek 10 April).

Mulcahy said: "With the industry's broadest portfolio of document technology, our growth initiatives are aimed at increasing distribution, bringing the quality of the Xerox brand to more businesses of any size."

The company was hit by the weakening dollar, recording net first quarter 2008 currency losses of $19 million, $16 million higher than first quarter 2007.