Xerox (XRX) was buffeted this quarter by forex headwinds and by a dramatic decline in revenues from developing markets. Revenues fell 14% in those markets, versus growth of 17% during Q1-308.
As we look at the BRIC countries, the biggest impact to Xerox would be Brazil and Russia where we have sizeable high growth businesses. India is a relatively small business for us so although conditions there certainly are not great, I wouldn’t say it’s had a dramatic impact overall. As you know China, we only see either the risk or the benefit through our equity relationship with Fuji Xerox.
So, as we look at domestic and foreign investment I think you have to look and say first of all in Brazil it was less activity driven, it was more currency driven. So, the Real was really the primary issue in Brazil. Although there was some economic decline it was not as radical as it was in Russia. In Russia it was clearly economic driven major deterioration. Literally, we didn’t see it until the second half of November so a dramatic shift in Russia.
I don’t think I would point to either domestic or foreign investment as being disproportionately responsible. We do a very, very large small and medium size business in Russia which would be more I would say domestic oriented business yet, a big player with multinationals as well. So, I would not point and say there was any significant difference there. I would say though to very different situations Brazil’s being more currency driven and Russia’s being more economy driven.
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