There are certain companies that probably cannot be turned around no matter who runs them. They tend to be in industries where macro-economic trends are against them, like the buggy whip business 150 years ago.
Investors are not likely to get much out of these firms, unless and until the trend that is hurting them is reversed
There is no denying that the Xerox brand is one of the most recognized in corporate America and has a lot of equity overseas as well. But, the stock is up about 10% over the last two years, well below the S&P. The problem is significant. The company is not growing. Xerox has a good footprint in digital copiers, high end printers and document management, but firms like Canon want the same customers. And, they are getting them.
Xerox owns a piece of Fuji Xerox, and weaknesses at that operation forced the company to cut its forecasts for the current quarter.
The fourth quarter of last year spoke volumes about Xerox’s challenges. Revenue rose 3% to almost $4.4 billion and net income fell from $282 million in the prior year period to $214 million. The company’s operating profit was up slightly. And guidance for the early part of this year was lackluster.
Xerox recently made The Wall Street Journal’s list of the 25 worst performing stocks over the last 10 years. Current annual revenue is as low as it has been over the last decade, so it is hard to see how the company can make the case that its new office products are gaining any ground.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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