In its Q3 results for the three months ended 30 September Xerox reported sales down 7.5% at $1.53bn (£1.18bn), with delays around two new products contributing to the situation.
This was the seventh consecutive quarter where sales have fallen short of expectations.
Sales at its biggest business unit, Print & Other, were down 7.5% at nearly $1.46bn, although profits at the wing were up 4.7% at $67m.
Adjusted operating margins increased to 5.2% (2023: 4.1%).
The net loss was $1.2bn including a $1bn goodwill impairment charge.
Xerox’s share price fell to a 52-week low of $8.02 on yesterday’s announcement (52-week high: $19.78). The shares have lost more than 50% of their value since the beginning of the year.
CEO Steve Bandrowczak said the firm’s ‘Reinvention’ plans involved multiple workstreams and a multi-year journey. He asserted: ”We will ultimately get to our end goal.”
"While equipment revenue fell short of expectations, we continue to see steady progress from Reinvention initiatives taken to date,” he said,
“Adjusted operating income and margin grew year-over-year, and the pending acquisition of ITsavvy will improve Xerox's value proposition with clients, as well as the mix of revenue from growing businesses.”
Bandrowczak said the Q3 results demonstrated that “no single quarter or performance metric in isolation defines our Reinvention”, and emphasised that operational improvements and enterprise-wide efficiencies were “driving services signings momentum, improved decision-making and a sustainably lower cost base”.
Xerox also updated its guidance for the year, excluding the pending $400m acquisition of ITsavvy, expected to complete in Q4.
The expected revenue decline has increased to 10% in constant currency terms, from the previous 5%-6% decline, with adjusted operating margins likely to be around 5% compared with prior expectations of “at least 6.5%”.
“Due to lower-than-expected revenue in 2024, we no longer expect to grow adjusted operating income $300 million above 2023 levels by 2026,” Xerox stated.
“However, we continue to expect growth in adjusted operating income and a return to double-digit adjusted operating income margin over the course of our Reinvention.”
Xerox also agreed to sell its EMEA paper business to Antalis during the period.
Last month Xerox announced a new strategic partnership with Taktiful Software Solutions to boost the use of digital embellishments.
