Wednesday, October 31, 2012

H-P's New Printers: A Big Launch for the Battered Company

Hewlett-Packard Co. HPQ -0.96% plans to unveil a new line of printers for businesses Tuesday, one of the first fruits of Chief Executive Meg Whitman's efforts to invest more in research and development as she tries to turn around the struggling technology company.
The printers, so-called multifunction machines that combine standard printers with scanners and software to manage electronic documents, are among the fastest-growing segment in the printing industry. But H-P, the world's largest printer maker by units, has just a middling share of the multifunction printer market—less than 12% of such laser color printers by its own estimate.

For Ms. Whitman, there is a clear cause: "We haven't had a new product lineup in seven years," she said. "It was very obvious that we had a product gap here."

The new printers are indicative of how Ms. Whitman plans to fix H-P. Since taking on the CEO job in September 2011, the 56-year-old has embarked on a strategy of controlling costs while still investing in new products.

Ms. Whitman has repeatedly blamed her predecessors for not investing in research and development as a reason for why H-P is now struggling. In May, she disclosed plans to cut 27,000 jobs, or 8% of H-P's workforce, by the end of 2014, partly in an effort to save money to develop new products.

At an event earlier this month, Ms. Whitman again warned the worst is yet to come for the company. H-P's stock is now trading near a 10-year low.

H-P's R&D spending has been limited among its tech industry peers. Between 2003 and 2010, H-P cut its R&D budget from $3.7 billion to $3 billion, even as revenue rose from $73 billion to $126 billion. In 2011, H-P spent 2.6% of revenue on R&D, while rival International Business Machines Corp. IBM +1.24% spent 5.8%.
More recently, H-P has increased R&D spending to $3.3 billion in 2011 and is on pace to do so again through the first three quarters of 2012. Ms. Whitman said some R&D priorities for H-P now include servers that consume less energy and new networking technology. She said H-P will eventually come out with a smartphone, but not in the next year.

Debuting new printers was a top priority for H-P. The printing business was once known as the crown jewel of the Palo Alto, Calif., company, given the highly profitable ink cartridges that H-P sells to support the printers. The printing unit brings in more than $25 billion in revenue a year and generates close to 30% of H-P's operating profit.

But H-P's printer business has lately struggled with declining revenue and earnings from operations as people print less and the company missed some markets. "We were not a part of the fastest-growing segment of the market," Ms. Whitman said.

Research firm IDC said companies sold about $45 billion of multifunction printers world-wide in 2011. Yet while competitors like Xerox Corp., XRX -1.16% Canon Inc. 7751.TO +1.50% and Ricoh Co. 7752.TO -3.05% Ltd. "all made strides in this market, H-P has held on to an existing portfolio that has aged over the years," said Keith Kmetz, an IDC analyst.
The new printers—priced around $2,500 to $3,000 each, though H-P hasn't disclosed pricing for all models—are primarily targeted at small businesses and teams at larger ones. Some models aim to replace more expensive laser printers with cheaper but equally robust ink-based ones.

Others combine several functions into one machine, letting someone print and scan. These multifunction machines also use software that H-P acquired along with Autonomy Corp. that helps businesses organize and search through documents once they are digitized.

Todd Bradley, who oversees H-P's printer and personal-computer businesses, called the lack of investment in the product a mistake that the company has worked hard to correct. He predicted that within a year, H-P would make progress selling the ink-based products to businesses with its multifunction line.

Thursday, October 25, 2012

Volume of printed pages declines slightly in 2011

Volume of printed pages declines slightly in 2011

Posted on 20 Oct 2012 at 2:00pm

Worldwide page volume from digital printers decreased to 3.09 trillion in 2011 from 3.12 trillion in 2010, a 1.0-percent year-over-year decline, according to new research from IDC.

Developing regions led the way with 7.5 percent page growth when compared to 2010. Latin America and Asia-Pacific(excluding Japan) were standouts with double-digit growth their respective regions. In contrast, page volume in developed markets declined 5.0 percent year-over-year.
A combination of a weak economy and major industry trends such as Managed Print Services, the green movement, and document workflow automation had a dampening effect on page volume growth in developed economies.

Worldwide single-function printers and single-function digital copiers declined in page volume and share in contrast to MFPs (Multi Function Peripherals), which gained both page volume and share.
MFP page growth showed regional variation with developing regions recording double-digit growth rates, while developed regions settled for single-digit growth. Single-function printers showed greater declines in developed regions in terms of their installed base and page volume.

For laser, MFPs are the leaders in total page volume but lag single-function printers in installed base. Worldwide laser single-function printers still generated a sizeable 1.1 trillion pages in 2011, but registered an overall decline in page growth of 2.4 percent.

For inkjets, MFPs are the dominant force both in terms of both page volume and installed base.
Color laser continued its penetration growth in both developed and developing regions. Developing regions continued to show double-digit page volume growth in color MFP. Color MFP pages in developed regions had single-digit growth, while its installed base grew in double digits.
In developed regions, color MFP installed base growth was strong in segment 2 (11-20ppm) and segment 3 (21-30ppm). Speed creep or the phenomenon of users moving up speed segment without necessarily printing more pages, contributed partly to a dampening of page volume growth.

Technology highlights
Color laser saw increases in both developing and developed regions for overall installed base growth and page growth. Worldwide color laser page volume grew 7 percent year over year.
Mono laser saw increases in developing regions in contrast to declines in developed regions. Overall this resulted in a worldwide decline in mono pages by 3 percent.

Inkjet’s share of the worldwide installed base slipped slightly to 63.6 percent (2011) from 64.4 percent in (2010). Inkjet saw a 1.5 percent increase in installed base in developing regions versus a decline of 0.6 percent in developed regions.

Vendors are continuing to roll out high speed A4 devices in segment 4 (mono and color). In mono, segment 4 (45-69 ppm) A4 format devices outnumber A3 format devices and the gap in installed base is increasing.

However, from a pages perspective, A3 format devices still produce at least two thirds of the total pages in mono segment 4. In color segment 4 (31-44 ppm), A3 format devices still outnumber A4 devices in both installed base and pages.

Although the gap in installed base is closing, A4 devices are still significantly behind A3 devices in total pages.

HP retained the number one position for overall worldwide page share in 2011. Canon and Xerox retained the number two and three rankings in worldwide page share.

Tuesday, October 23, 2012

Xerox Equipment Sales Revenue Down 17%, Q3 2012 Earnings

Xerox Equipment Sales Revenue Down 17%, Q3 2012 Earnings

Xerox Q3 Earnings are out. =Earning and Sales were soft and the tone of the call was somber.
Here are some highlights of the earnings report, followed by the earnings release:


Equipment (copiers/printers) Sales Revenue -17%

Q3 Profit -12%

Equipment Financing Interest -13%

Research and Development -12%

Supplies Sales -8%

Mid Range Color Installs -7%*

Mid Range B&W Installs -14%*

High-End B/W Installs -31%

Digital Pages -3%

Color Revenue -6%


A4 Color MFD Installs 46%

A4 B/W MFD Installs 38%

Color Pages 9%

High-End Color Installs 32%

*59% of Technology Revenue is “Mid Range” Copiers/MFPs

NORWALK, Conn., Oct. 23, 2012 – Xerox (NYSE: XRX) announced today third- quarter 2012 adjusted earnings per share of 25 cents, which excludes 4 cents related to the amortization of intangibles, resulting in GAAP earnings of 21 cents per share.

In the third quarter, total revenue of $5.4 billion was down 3 percent or down 1 percent in constant currency.

Revenue from the company’s services business was up 6 percent in constant currency, partially offsetting a 7 percent constant currency decline in technology revenue, which represents the sale of document systems, supplies, technical service and financing of products.

During the third quarter, upfront investments in new services contracts as well as the impact of government budgetary pressures on existing contracts led to an 8.6 percent operating margin, down 1 point from third-quarter 2011. Gross margin was 31 percent, and selling, administrative and general expenses were 19.4 percent of revenue.

“Our third-quarter performance aligns with shifts in our business as services become a larger proportion of our revenue, and reflects the dynamics of a challenging economy that is creating cost pressures for large enterprises and governments,” said Ursula Burns, Xerox chairman and chief executive officer.

“Steady growth in services is consistent with our strategy. Scaling our offerings in business process, IT and document outsourcing gives us a diversified portfolio that helps mitigate declines in equipment sales and supplies,” she added. “In our technology business, we benefit from healthy operating margins that support our bottom-line performance. We’re accelerating growth in print-related markets that are expanding, like serving more small and mid-size businesses through indirect channels, and we’re maintaining our profitable leadership in markets that are contracting.”

In the company’s services business, constant currency revenue from business process outsourcing grew 9 percent, IT outsourcing grew 6 percent and document outsourcing, which includes the company’s leading managed print services offerings, was up 4 percent.

Xerox Corporation

45 Glover Avenue

P.O. Box 4505

Norwalk, CT 06856-4505

t +1-203-968-3000

“While we’re pleased with the continued revenue growth trajectory in services, the profitability of a few contracts has been hampered by constraints in government spending, delaying implementation on committed projects that required our upfront investments,” said Burns. “We believe this is a short-term consequence of current macro and political conditions. But, we remain cautious, and we are focused on reducing costs to absorb the impact and improve margins while investing in key areas of growth and delivering strong cash flow.”

The company generated $594 million in cash from operations and is on track to deliver full-year operating cash flow of $2 billion to $2.3 billion as well as repurchase $900 million to $1.1 billion in Xerox stock during the year.

During the fourth quarter, Xerox is planning to take a restructuring charge in the range of $50 million to $100 million. Until the plans are finalized, the company’s EPS guidance excludes this charge. Xerox expects fourth-quarter GAAP earnings of 29 cents to 31 cents per share. Fourth-quarter adjusted EPS is expected to be 33 cents to 35 cents per share. As a result, full-year 2012 GAAP earnings per share are expected to be 92 cents to 94 cents and full-year adjusted earnings per share are expected to be $1.07 to $1.09.

About Xerox
With sales approaching $23 billion, Xerox (NYSE: XRX) is the world’s leading enterprise for business process and document management. Its technology, expertise and services enable workplaces – from small businesses to large global enterprises – to simplify the way work gets done so they operate more effectively and focus more on what matters most: their real business. Headquartered in Norwalk, Conn., Xerox offers business process outsourcing and IT outsourcing services, including data processing, healthcare solutions, HR benefits management, finance support, transportation solutions, and customer relationship management services for commercial and government organizations worldwide. The company also provides extensive leading-edge document technology, services, software and genuine Xerox supplies for graphic communication and office printing environments of any size. The 140,000 people of Xerox serve clients in more than 160 countries. For more information, visit, or For investor information, visit

Non- GAAP Measures:
This release refers to the following non-GAAP financial measures:

Adjusted EPS (earnings per share) for the third quarter 2012 as well as for the fourth quarter and full year 2012 guidance that excludes certain items.

Operating margin for the third quarter 2012 that excludes certain expenses.

Constant Currency revenue growth for the third quarter 2012 that excludes the effects of currency translation.Refer to the “Non-GAAP Financial Measures” section of this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measure.

Forward-Looking Statements

This release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as they relate to us, are intended to identify forward-looking statements. These statements reflect management’s current beliefs, assumptions and expectations and are subject to a number of factors that may cause actual results to differ materially. These factors include but are not limited to: changes in economic conditions, political conditions, trade protection measures, licensing requirements and tax matters in the United States and in the foreign countries in which we do business; changes in foreign currency exchange rates; actions of competitors; our ability to obtain adequate pricing for our products and services and to maintain and improve cost efficiency of operations, including savings from restructuring actions; the risk that unexpected costs will be incurred; our ability to expand equipment placements; the risk that subcontractors, software vendors and utility and network providers will not perform in a timely, quality manner; the risk that individually identifiable information of customers, clients and employees could be inadvertently disclosed or disclosed as a result of a breach of our security; our ability to recover capital investments; development of new products and services; our ability to protect our intellectual property rights; interest rates, cost of borrowing and access to credit markets; the risk that multi-year contracts with governmental entities could be terminated prior to the end of the contract term; reliance on third parties for manufacturing of products and provision of services; our ability to drive the expanded use of color in printing and copying; the outcome of litigation and regulatory proceedings to which we may be a party; and other factors that are set forth in the “Risk Factors” section, the “Legal Proceedings” section, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other sections of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012 and our 2011 Annual Report on Form 10-K filed with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments, except as required by law.


Media Contacts:

Karen Arena, Xerox, +1-203-849-5521, Ken Ericson, Xerox, +1-410-571-0161,

Note: To receive RSS news feeds, visit For open commentary, industry perspectives and views visit,,,

XEROX®, XEROX and Design® are trademarks of Xerox in the United States and/or other

Friday, October 12, 2012

10 Advantages of Leasing for 2012 Q4

Ten Advantages in Leasing:

Its that time of the year when important decisons are often made on how to deploy equipment inside your organization. In most cases, it makes sense to Lease Office Equipment ( Copiers, Printers, Software and Services) rather than pay cash. Consider the following reasons to consider leasing for your oganization.

1. If you do not have the cash, pay for use over time.
2. Better Management of Cash Flow so can pay bills.
3. Cash for account receivable discounts and other discounts.
4. Less hassle than going to my bank.
5. May help cut overhead with better, faster equipment, computers, et. al.
6. May help in up-grading equipment sooner; better planning/results.
7. Don't need to bring in a partner or investors.
8. Keeps current credit cards and arrangements with other creditors in line.
9. Take advantage of current depreciation allowances. Look into Section 179
10. Equipment to improve productivity, efficiency, perhaps cut overhead.

The latest survey indicates the Top Five Reasons for Choosing Leasing:
1. 95%----Bank won't help me.
2. 2%---Cash flow---Better use of cash.
3. 2%-- Easier to apply for.
4 09%---Dealer Convenience (if he wants to sell, better get me approved)
5. 01%--Tax implications (if I make a profit this year)

Thursday, October 4, 2012

HP's profitable printers to buy Whitman time - Yahoo! Singapore Finance

By Poornima Gupta
SAN FRANCISCO (Reuters) - Meg Whitman has a laundry list of things to do at HP: Arrest a rapid decline in its personal computer unit, compete better on enterprise services, and figure out a strategy as mobile devices eat into personal computer sales.

That leaves one still-bright spot in Hewlett-Packard's beaten-up portfolio - printing.
The HP chief executive in past months has punctuated talk about her years-long turnaround plan with sweeping goals such as battling IBM and Dell Inc on corporate services and products, using Silicon Valley buzzwords such as "cloud" and "social" and "big data." In the short run, however, its printers are buying time for the CEO of one year to turn around the sprawling company with over 300,000 workers.

Whitman on Wednesday will host HP's annual presentation to investors in San Francisco, and Wall Street is keeping one eye on a division that her predecessor once considered spinning off.
Though it has lost some of its shine, the unit still generates close to a fifth of total revenue and 35 percent to 40 percent of HP's annual profit.

Printing is "not as much a problem as some of the other businesses," said Shaw Wu, analyst with Sterne Agee. "It's still a cash-cow business. The profits have declined but they are still very strong."
Revenue from all of HP's main business units fell in the July quarter, with the PC unit seeing a slide of 10 percent. Operating profit declined by 28 percent in the PC group, the largest slide among HP's divisions, followed by a 22 percent slide in services.

Printing revenue declined 2.7 percent last quarter, but operating profit increased by 8 percent. The group accounted for $949 million of HP's $3.1 billion in operating income that quarter.
Wu is expecting HP's annual printing revenue to decline by about $1 billion to $25 billion this fiscal year, which ends in October.

HP's imaging and printing group has historically been a steady business - with an operating margin of 16 percent last quarter, almost double the company overall - because of recurring sales of printer cartridges.

But the industry is facing some fundamental challenges. Most printer makers are struggling with falling sales: Printing has been a target of corporate cost-cutting, and personal computing has moved to tablets and smartphones.

By dint of the printing unit's sheer scale, any small increase in revenue could have a big impact on HP's bottom line. Whitman is trying to stabilize the printing business and reduce excess inventory. She has merged the group into the ailing personal computer business to better package product sales to corporations.

In August, Lexmark, never a dominant player in consumer printers, said it will stop making inkjet printers and focus on its more profitable imaging and software businesses. The announcement reminded investors about the intense competition, falling margins, and gradual mobile migration the sector is now coping with.

Lexmark reflected a broader pattern of problems in the industry: Xerox Corp cut its full-year profit outlook in July, while Canon trimmed its operating profit forecast as the companies braced for tough economic conditions in Europe.

Now, the Silicon Valley giant needs to make a big move into the fast-growing sector of industrial printing or three-dimensional printing, analysts said.
Three-dimensional printing - a process by which an object or prototype is built from a digital model - is commonly used in the automotive, aerospace and dental industries.
"Companies like HP have to look at where the next big opportunity is," said Terry Wohlers, president of research firm Wohlers Associates Inc. "3D printing is a good fit."
The market for 3D printing was at $1.7 billion last year and is expected to reach $2.1 billion this year and grow three-fold to $6.5 billion by 2019, according Wohlers Associates.
"With their strong marketing and distribution muscle, HP is in a very good position to dominate the market, and they could buy up most of the companies in this business if they wanted to because it's a relatively small but fast-growing and vibrant area," Wohlers said.
HP's thinking on this point is unclear. In August, the company ended its relationship with 3D printer manufacturer Stratasys, which has been making HP's exclusive line of 3D printers since 2010. HP mostly marketed the 3D printers in Europe.
The largest U.S. technology company by revenue is trying to keep its core personal computing business profitable as competition from mobile devices erodes sales. HP is trying to transform itself into a major enterprise computing provider, while slashing expenses to boost the bottom line.
The company is laying off 29,000 employees over the next two years, has written off $10.8 billion that was mostly related to the writedown of its EDS services business, and its business continues to be hit by a slowing economy in most of its biggest regions, including Western Europe and China.
Whitman is expected to provide HP's outlook for the next fiscal year and an update on the company's restructuring plans.
The analyst meeting "comes at a crucial point in the company's struggle to maintain its relevancy in an increasingly competitive IT industry," said Topeka Capital Markets analyst Brian White, who expects HP to offer a conservative outlook.
Wall Street analysts on average expect HP's revenue to decline to $120.08 billion in fiscal 2013 from an estimated $121.14 billion this year, according to ThomsonReuters I/B/E/S.
Jefferies analyst Peter Misek said he expects HP's outlook for 2013 to come in well below Wall Street estimates given "cyclical and secular headwinds for HP's PC, services, and printer businesses."
(Reporting by Poornima Gupta; Editing by Prudence Crowther and Ryan Woo)