Reinvention strategy cushions losses as print revenue drops and IT growth surges.
Xerox reported a narrower first-quarter loss despite continued weakness in its core print business, as its IT services segment more than doubled revenue following the ITsavvy acquisition.
The company posted a net loss of $90 million (€84 million) for the three months to March 31, compared with $113 million (€106 million) a year earlier. Pre-tax losses narrowed to $67 million (€63 million), helped by cost savings and lower restructuring expenses.
Group revenue fell 3% year-on-year to $1.46 billion (€1.37 billion), as a 9.4% decline in the print and other segment offset 122% growth in IT Solutions revenue to $164 million (€153 million).
Equipment sales slipped 2.1% to $284 million (€266 million). While mid-range devices grew modestly, high-end printer sales dropped 14.9% following the exit from some production print operations. Overall equipment installations rose 24%, led by growth in entry-level and mid-range devices.
Post-sale print revenues, including services, supplies and financing, fell 11.2% to $1.01billion (€947 million), weighed down by lower managed print services income and reduced financing volumes.
Tariff risks remain a concern, with current duties forecast to reduce full-year operating income by up to $50 million (€47 million). Xerox said it is mitigating the impact through price rises, sourcing changes and cost-cutting.
The company reaffirmed its 2025 guidance.
Pending regulatory approvals, Xerox expects to close its acquisition of Lexmark later this year, targeting earnings accretion of more than $1 (€0.94) per share.
