Xerox Q4 Conference Call

You can read the full transcript at Seeking Alpha. Since, I'm just a blogger with a big piece of my little IRA in Xerox, please take the following comments and questions in that context:

1. We seem to have lots of currency risks.
2. Color is nice, but black and white is still the bulk of the business. Given that the Nuvera is arguably the best machine on the market, what's the plan?
3. If 70% of the revenue comes from post sale, does 70% of the costs go to increasing post sales in an environment where box sales are going to be slow for a couple of quarters?
4. How come SG&A is going up. I keep reading about people getting fired, but WalMart SG&A Was 16+% last quarter. Meanwhile, our SG&A went up, not down?
5. How come Oce made a profit and we couldn't?
6. Has there been any discussion of spinning off divisions that don't contribute to post sales revenue?

Following are some quotes, taken out of context from the transcript:

The impact on earnings was largely due to the strengthening of the Yen and deteriorating developing market economies particularly in Russia and Eastern Europe which started in the later part of the quarter.

As you all know, more than 70% of our revenue comes from our post sale.

Our growing services business also flows through the post sales. With a value proposition that helps customers reduce costs we are getting more and more interest in our outsourcing and other document services.

Wholesale revenue was down 8% or 3% in constant currency. Again, this was largely due to distributors holding lower supply inventory levels as they prioritize cash at the end of the year.

Equipment sale revenue declined 15% or 11% in constant currency, a reflection of weakened economies all around the world with especially significant decline in key development markets. I’ll talk more about this in a moment.

Selling, administrative and general expenses were 25.2% of revenue, up about a point from the fourth quarter of 2007 as we maintained our sales coverage investments to continue building on our industry leadership.

SAG declined $84 million including $68 million beneficial impact of currency.

Digital machines in the field MIF and pages continue to grow 6% and 1% respectively driven by color machines in the field up 33% and color pages up 24%.

The pressure on digital pages has been in black and white and we did see a decline in fourth quarter. The pressure on digital pages has been in black and white as I said and in addition the decline in DMO supplies had a negative effect on how we calculate their pages and this should improve in the future.