XEROX 2Q PROFIT FALLS 19% ….DOWN $ 51Million

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XEROX 2Q PROFIT FALLS 19% ….DOWN $ 51Million

 user 2008-07-24 at 11:23:24 am Views: 51
  • #19884
    Xerox Profit Falls 19% on Lower Prices for Printers
    08  — Xerox Corp., the world’s largest maker of high-speed color
    printers, said second-quarter earnings fell 19 percent as the company
    lowered prices on new equipment.Net income declined to $215 million, or
    24 cents a share, from $266 million, or 28 cents a year earlier, the
    Norwalk, Connecticut-based company said in a statement. The results,
    which include a 5-cent restructuring charge, missed analysts’
    estimates. Sales rose 7.7 percent to $4.53 billion.

    Xerox cut
    prices on its devices that can print, scan, fax and copy documents by
    as much as 10 percent during the quarter, trimming profit even as
    installations of the machines rose. Chief Executive Officer Anne
    Mulcahy is relying on the company’s Global Imaging sales network to
    boost orders from small- and mid-sized businesses “while the U.S.
    economy creates challenges” to large companies, she said in the
    statement.`We are seeing information technology declining a little
    bit,” said Tom Smith, an equity analyst with Standard & Poor’s in
    New York. He rates Xerox a “hold.” “We’re seeing incremental growth
    subject to pressure from moderating tech spending.”

    Xerox rose
    26 cents to $14.03 yesterday in New York Stock Exchange composite
    trading. It has lost 13 percent this year.The average of nine analyst
    estimates compiled by Bloomberg was for profit of 26 cents a share and
    sales of $4.53 billion. The company in April forecast earnings in the
    range of 23 cents to 25 cents a share, including a 5-cent restructuring
    charge.Third-quarter profit is forecast to be 28 cents to 30 cents, the
    company said. Analysts, on average, estimate third-quarter earnings of
    30 cents.

    Full-Year Forecast
    For the full year, the company
    reaffirmed its April projection for earnings of $1.26 to $1.30 a share.
    Xerox in November forecast sales growth of 3 percent, or about $17.7
    billion, based on last year’s revenue. Analysts, on average, expect
    $1.27 in profit and $18.4 billion in revenue.Xerox, which elected
    former Citigroup Inc. Chief Executive Officer Charles Prince to the
    board earlier this month, won a $400 million contract to provide
    printers and supplies to the U.S. Air Force in April. It also has a
    smaller contract to manage printing needs on 283 Navy ships.Mulcahy,
    55, reinstated the company’s dividend in November, the first payout
    since 2001, and returned Xerox’s debt rating to investment grade. Xerox
    sold $1.4 billion of 5- and 10-year notes in April to pay down debt and
    for general corporate purposes in its biggest debt sale.The company
    also introduced a faster, more efficient digital printer at the Drupa
    trade show in Germany to boost sales to professional print shops. The
    company is aiming to capture more of the commercial market as printers
    move to digital devices from offset presses