*NEWS*XEROX 4TH Q. PROFIT RISES 18%

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*NEWS*XEROX 4TH Q. PROFIT RISES 18%

 user 2006-01-26 at 10:13:00 am Views: 68
  • #14221

    Xerox fourth-quarter profit rises 18 percent
    NEW
    YORK  – Xerox Corp.  on Wednesday said quarterly profit rose 18 percent
    on strong demand for its high-margin digital color copier supplies and
    services, and 2006 earnings should hit the high end of its previous
    forecast.
    Xerox, which over the past two years has unveiled many new
    digital printers and office systems, said customers shifted to
    lower-priced systems during the quarter, but it still sees solid demand
    driving recurring sales of supplies and services.
    “This increased
    activity fuels future post-sale revenue,” Chief Executive Anne Mulcahy
    said in a statement. “We’re confident that the short-term impact on
    equipment sale revenue will deliver long-term gains in top-line growth.”
    The
    company, best known for its copiers even as it expands its offering of
    document management services, said net income rose to $267 million, or
    27 cents a share, after payment of preferred dividends, from $226
    million, or 24 cents a share, a year earlier.
    Excluding
    restructuring costs, Xerox earned 32 cents a share, meeting analysts’
    average expectations, according to Reuters Estimates.
    Xerox shares eased 6 cents to $14.40 in early New York Stock Exchange trade.
    Cross
    Research analyst Shannon Cross said the results were mixed overall, but
    she was encouraged by Xerox’s ability to build its long-term revenue
    stream and generate cash to reinvest in its businesses, pay down debt
    and buy back its stock.
    “The cash quarter was extremely strong,” Cross said. “(Xerox) is a cash flow story. and they did a billion in cash last year.”
    Revenue fell 2 percent to $4.25 billion, short of analysts’ estimates of $4.42 billion.
    Without
    the negative affect of currency conversion, sales would have risen by 1
    percent. Xerox said. Revenue from color products increased 17 percent.
    ANOTHER $500 MILLION STOCK BUYBACK
    Although
    it has grabbed market share from competitors, Xerox is still struggling
    to increase its revenue in a sluggish market, where pricing pressures
    have cut into margins. The Stamford, Connecticut, company has said it
    expects digital sales to yield higher profit margins.
    Over time,
    Xerox’s sales of color printers yield five times the revenue of
    black-and-white systems, fueled by service contracts and supplies like
    paper and replacement ink and toner.
    Fourth-quarter gross margins improved fractionally to 41.4 percent.
    For the second quarter in a row, Xerox said it would buy back up to $500 million in its common stock.
    The
    company said it sees its first-quarter profit in the range of 20 cents
    to 23 cents per share, compared with analysts’ estimates of 22 cents.
    Xerox
    reiterated its full-year 2006 earnings forecast of $1 to $1.07 per
    share, although it now expects results to be in the high end of that
    range. Wall Street is expecting profit of $1.04.
    Xerox stock, down 9
    percent in the past 12 months, trades at 16 times estimated 2006
    earnings, compared with a multiple of 21.28 for the Merrill Lynch
    Technology 100 index.