Xerox - No Surprises - Earnings Below Expectations, Blames the Yen...

Sales of printers and other hardware plunged 15 percent as companies cut technology budgets. Customers are cutting orders and distributors are reducing inventory, Mulcahy said.

Late last year Xerox announced a restructuring plan that included about 3,000 job cuts, aimed at saving $200 million in 2009.

Revenue fell 10 percent to $4.37 billion.

Revenue from sales of supplies and services -- known as "post-sale" revenue -- fell 8 percent to $3.1 billion. Equipment sale revenue declined 15 percent to $1.3 billion, reflecting "weakened economic conditions around the world," Xerox said.

"In the fourth quarter, the continued weakening economy and rapid shift in exchange rates put pressure on the business," said Anne Mulcahy, chairman and chief executive officer. "Despite this challenging marketplace, we delivered $265 million in adjusted net income for the quarter and $985 million for the year."

"We continue to prioritize cash and productivity to give us flexibility in this uncertain environment," she added. "Our fourth-quarter restructuring will deliver $200 million in savings this year. And, last year we generated $1.7 billion in adjusted cash from core operations. We believe our strong balance sheet and disciplined approach to cost reductions strengthen our ability to effectively manage through these tough economic times."

The movement of the Yen, in just the last six weeks of the year, effected the reduction in margins - the movement was so quick, that the traditional action of pricing increase could not keep up. This dynamic resulted in 50% of the 10% downshift in margin.

Xerox MIF up 4% in December and an increase in color pages could not overcome negatively "currency" issues which sliced into revenues .

During 2008, Xerox Global Services generated $3.5 billion in annuity revenue, a 3 percent increase over 2007.

Full statement here. (PDF)
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Summary

All in all, Xerox took hits due to global economic forces. Activity was only down compared to historical data - actual new color pages printed increase 18%(compared to an increase of 25% last year).

Also, shrinking orders from distribution, effected overall performance, although MIF increased by 4%.

And because, like all copier models, new agreements equate repeatable revenues/cash flow, etc, the big X is doing fine.

We should all be worried when Xerox starts to report a increase in defaulted agreements - meaning their customers are going out of business.

More Screens, More Productivity - How About This?

Jim Lyons mentioned how employee productivity increases if they use dual screens, as much as 44%. I wonder how much productivity would increase with this?

 

Check this:

Minority Report - Who Needs Paper?

Microsoft, Google - Join Intel, Lexmark with Bad News and Staff Reductions

Microsoft

"Our financial position is solid ... but it is also clear that we are not immune to the effects of the economy," Chief Executive Steve Ballmer wrote to employees in a letter. "Consumers and businesses have reined in spending, which is affecting PC shipments and IT expenditures."
Microsoft will be eliminating 5,000 job with 1,400 going immediately, the rest over 18 months.

Microsoft's staggered elimination of 5,000 jobs -- 1,400 immediately and the rest over 18 months.

Lexmark

The economic slump prompted customers to rein in spending, hurting demand for printers. Lexmark has already trimmed about a 10th of its workforce in two years to cope with slowing orders and competition from market leader Hewlett-Packard Co. The new job cuts are aimed at saving $50 million a year.

“We saw weaker-than-expected market demand for both hardware and supply,” Chief Executive Officer Paul Curlander said.

Google

Google said fourth-quarter profits fell 68 percent to $382 million ($1.21 per share), from $1.2 billion ($3.79) a year ago.

Much of the decline was attributed to a $1.09 billion charge for soured investments in wireless provider Clearwire and in the AOL Web portal. A settlement over copyright infringement with book publishers added $95 million in costs.

Intel

After reporting its first quarterly loss in 22 years, Santa Clara computer chip maker Intel on Wednesday said it will lay off at least 5,000 employees and shut five manufacturing plants.

AMD

AMD reported its ninth straight loss as PC sales slow, then stall, and finally fall.