January 27, 2014
Xerox (XRX) shareholders awoke Friday morning to news of a lackluster quarter. For the quarter ending December 31, total revenues were down 3%. The company's services business was flat while the document technology business declined 6%. As we continue to see Xerox push forward in their transition from a copier company to providing business solutions, investors may find it disheartening that the services segment wasn't able to pick up the slack in the fourth quarter. On a positive note, Xerox did announce an 8.7% increase to their quarterly cash dividend.
Friday came after a year of steady performance for shares of XRX. Prior to Friday morning, since February 1, 2013, the shares had risen approximately 47%. Below is the one year chart for XRX:
Although many feel that the dividend increase is a sugar coating on a bitter pill, the recent price decline may present an opportunity for investors. Since I don't have a crystal ball and can't predict whether the share price will return to previous levels or if they will be able to maintain their dividend, we can see one thing; we can see a company transitioning from just copiers to providing complete business services such as parking meter solutions, toll road services, healthcare monitoring devices, etc. Unlike another local company, who recently emerged from bankruptcy (Kodak), Xerox seems to be making a substantial attempt to further diversify their company's business offerings.
Ethan Wade, Financial Advisor
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).