Saturday, January 24, 2009

Highlights from Q4 Conference Call

Read the transcript at Seeking
Selling, administrative and general expenses were 25.2% of revenue, up about a point from the fourth quarter of 2007
. . .
Through the third quarter 2008 revenue from DMO was up 17%. In the fourth quarter revenue from DMO declined 14%. 11 percentage points of this decline is entirely due to major shifts in currency in several developing markets.
. . .
In addition, we’re pleased with the demand for our color continuous feed system which just recently launched in North America.
. . .
Installs of color multifunction systems were up 9% in the fourth quarter.
. . .
while fourth quarter revenue from color was flat in constant currency, color pages were up 23% and now represent 18% of total pages printed on Xerox technology
. . .
According to Gartner we hold the number one market share for managed print services for more of 50% of the total market.
. . .
Coupled with our $2 billion revolver we have the ability to run our business and pay down debt with no requirement to access capital markets unless we choice to.
. . .
Brazil it was less activity driven, it was more currency driven. . . . In Russia it was clearly economic driven major deterioration. Literally, we didn’t see it until the second half of November so a dramatic shift in Russia.
. . .
But, we’re not having litigation in ’09.
. . .
we have no plans to buy back shares unless the capital markets change.
. . .
We actually walked out of the year with nice backlogs in the 700s and iGen4 which is terrific.
. . .
color remains quite good and certainly the hot products 700 and iGen, we’re seeing very healthy backlogs on. . . . services signings up in the fourth quarter and fourth quarter last year was really strong
. . .
. . . we’ve even added . . . on the incentive side for our field organization on what we call same account revenue growth
And with all this, according to SeekingAlpha, we lost 7.38% on Friday. My theory is that Wall Street is still focused on the next quarter, the conventional wisdom that we are on office equipment company and there is just too much noise for the signal to get through. While they focus on the noise of the "financial results" they don't see how the business is doing.

It's pretty clear that the talk about sustainable business and long term growth is still just talk for most "analysts." Besides it's much easier to talk about profit expectations for the next quarter.

Maybe Buffet will notice.

While we're waiting for the "Market" to figure it out and our PR and Advertising Agency to amplify the signal, it would be great to change .17 dividend and 2.40 yield. We can do better than .17.

And someone really should fix this.

FYI. Here's what Matthew Daneman • Staff writer • January 24, 2009 for the Democrat and had to say, under a headline that reads:

Xerox outlook not favorable

Xerox Corp. headed into 2008 seemingly humming along, with sales and earnings per share up notably over 2007 and its stock trading at more than $14.

Heading into 2009, the area's fourth-largest employer is in decidedly more dour circumstances.

Xerox broke even for the last three months of 2008, while its overall profits for the year were 20 percent of what they were in 2007. And the Connecticut-based printing and document services company is expecting depressed earnings through 2009.

Xerox announced its fourth-quarter and year-overall 2008 financial results Friday. Wall Street was not pleased with the results, with shares closing Friday at $7.03, down 56 cents, or 7.4 percent.

"Wall Street was not pleased." Wall Street spent lots of time being "pleased" with the noise - "financial results" - from the Banks. Then when the roof caved in, they all ran around saying that "no one saw this coming."

Give me a break!

Meanwhile, here's how they played it at Global Crisis News:

Xerox reports a $1million profit

January 24, 2009 by Greg

Xerox Corp., (XRX.N) the biggest maker of high-speed color printers with global operations said fourth-quarter net income was $1 million, or nothing per share. That is down from $382 million, or 41 cents a share, a year earlier. It is well understood that we are talking about a big drop in net income, nevertheless, the company is not in the red like countless other firms around the globe.

I'm liking "the biggest maker of high-speed color printers with global operations."

The geniuses over at Forbes said:

Xerox's Picture Lacks Clarity

Miriam Marcus, 01.24.09, 01:00 AM EST

Soft sales in emerging markets sent the copier maker’s Q4 earnings down 99.7%.

Economic woes are making for a fuzzy outlook at copy-industry pioneer Xerox. The company posted a hefty 99.7% decline in fourth-quarter profits on Friday as demand for its copy and printing services eased in Russia and other emerging markets.

Copy maker?

The New York Times (actually Reuters) said:
Xerox 4th-Quarter Profit Falls to Nearly Nothing

'The Xerox Corporation said fourth-quarter profit shrank to nearly nothing, hurt by restructuring costs and a decline in demand from Russia.Xerox Corporation said fourth-quarter profit shrank to nearly nothing, hurt by restructuring costs and a decline in demand from Russia.

Higher manufacturing costs resulting from an increase in the value of the Japanese yen also caused the company, a leading provider of digital printers and document management services, to forecast a first-quarter profit short of analysts’ targets.
The Guardian said (Also a Reuters re write)
Xerox profit falls on restructuring costs; shares fall
By Franklin Paul
NEW YORK, Jan 23 (Reuters) - Xerox Corp barely eked out a profit in the fourth quarter, hurt by a dramatic decline in demand from Russia and other emerging markets and $349 million in restructuring costs, sending its shares lower.
The leading provider of digital printers and document management services, whose growth is driven by sales of services and supplies for printing machines, also forecast first-quarter results below analysts' targets.
If you're interested in more, Google "Xerox" in News. Search. This morning it got about 245 hits, with all the different ways to say similar things.

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