Xerox 4Q Earnings Surge On 2008 Charges; Shares Up On View
Last update: 1/21/2010 7:35:31 AM
DOW JONES NEWSWIRES
Xerox Corp. (XRX) reported surging fourth-quarter earnings amid prior-year charges and as demand continued to improve from earlier this year. But revenue fell 3% from a year earlier and Chief Executive Ursula Burns said the top line "will continue to be under pressure until there is a more sustainable economic recovery." For the new year, Xerox projected earnings of 75 cents to 85 cents a share, compared with analysts' average estimate of 70 cents, according to Thomson Reuters. As a result of that upbeat forecast, shares rose 3.2% premarket to $9.17. The recession has exacerbated weak demand for printers and the international sector that accounts for much of Xerox's revenue has seen profits muted by a strong dollar. In a bid for new markets, Xerox agreed in September to pay about $6 billion for business-software provider Affiliated Computer Services Inc. (ACS). The printer and copier maker posted earnings of $180 million, or 20 cents a share, up from $1 million, or a negligible amount per share, a year earlier. The latest quarter included 5 cents in acquisition-related charges while the prior-year's charges totaled $349 million. Xerox had projected earnings of 20 cents to 22 cents. Revenue dropped to $4.22 billion, while analysts' average estimate was $3.92 billion, according to a survey of analysts by Thomson Reuters. Gross margin widened to 39.9% from 37.9%. Most of Xerox's sales are from services businesses that include maintenance contracts, printing supplies and lease revenue. So-called post-sale revenue was flat, with currency changes boosting results. Equipment sales fell 11%. -By Joel Stonington, Dow Jones Newswires; 212-416-2934; joel.stonington@wsj.com; (END) Dow Jones NewswiresJanuary 21, 2010 07:35 ET (12:35 GM
