Europe puts a hurt on Xerox Q4 sales

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Date: Thursday January 26, 2012 07:52:59 am
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    Europe puts a hurt on Xerox Q4 sales

    The economic downturn in Europe means fewer companies buying office equipment, digital printing presses and the supplies that go with them.And that, in turn, is resulting in some anemic results for Xerox Corp., both now and for the foreseeable future.

    "We’re planning for continued weak activity," CEO Ursula Burns said Wednesday as the company announced fourth-quarter and full-year financial figures. "It’s all over Europe."

    For the three months that ended Dec. 31, Xerox’s technology business — which accounts for much of the employment at its Webster manufacturing campus — was down 5 percent from the same quarter a year earlier.

    The European slowdown widened the gap between Xerox’s growing and vibrant business services operations and its traditional technology operations. Service revenue for the quarter was up 6 percent and now accounts for 48 percent of Xerox’s sales, compared with 45 percent from technology.

    This year will see Xerox increasingly become a services-centric company. Chief Financial Officer Luca Maestri said services will probably grow by several percentage points in 2012 while economic issues will keep technology sales flat to slightly decreased.

    The European downturn and its impact on Xerox come on the heels of the company having to deal with effects of last March’s earthquake and tsunami in Japan, which reduced supplies of electronic components. Maestri said supplies from Japan have rebounded.While Europe has been slow, developing markets remain strong and the United States has been improving, Burns said.

    Fourth-quarter revenue totaled slightly less than $6 billion, the same as the fourth quarter of 2010. The company fell slightly short of Wall Street expectations on sales, as analysts surveyed by Bloomberg News had expected revenue of slightly more than $6 billion.

    But Xerox met earnings expectations of 33 cents per share, adjusted for one-time items.Wall Street wasn’t pleased, however, with Xerox shares closing Wednesday at $7.81, down 86 cents, or 10 percent.

    Xerox ended 2011 with 6,300 workers in the Rochester region, down 500 from the end of 2010. During 2011, it transferred about 250 engineering positions to HCL Technologies Ltd. of India.

    The Rochester region is home to Xerox’s largest manufacturing campus and numerous corporate functions, though the company is headquartered in Norwalk, Conn.

    Xerox’s growth in the services arena received a dose of steroids in early 2009 with the $6.4 billion purchase of ACS, a Texas-based business process outsourcing company. It has been operating since then as "ACS, a Xerox Company," though Xerox said Wednesday it was doing away with the ACS brand and making everything "Xerox." It did not give a timeframe.

    During the fourth quarter, the company spent $66 million on employee severance as it cut 1,000 workers, primarily across North America. During 2011 overall, the company spent $264 million on severance packages as it shrank by 6,000 employees.

    Xerox ended 2011 with 80,500 employees in the U.S. and 140,000 worldwide.
    There are some bright signs for local workers. Installations of high-end color digital printing presses — such as the Webster-made iGen4 and CiPress — were up 7 percent in 2011.

    The company spent $700 million last year buying back shares. Xerox said Wednesday that its board had approved spending an additional $500 million on share repurchases, bringing the total amount available to more than $1.3 billion.The company said it expects to spend between $900 million and $1.1 billion buying back shares this year.

    http://online.wsj.com/article/SB10001424052970203718504577182770435119092.html
    Xerox 4Q Reports Higher Profit, Flat Revenue
    weakness at the printer-and-copier division

    Xerox Corp. reported a higher fourth-quarter profit on flat revenue, as strength in its services operation offset weakness at the printer-and-copier division.

    The Norwalk, Conn., company continues to expand its technology service offerings, such as managing EZPass highway toll systems and employee benefits. But it gave a cautious outlook Wednesday and said the lackluster economy and the cost-conscious attitude of U.S. government customers remain challenges to revenue growth. Europe’s economic weakness also has weighed on its traditional printing operation.

    Xerox forecast a per-share profit of 21 cents to 24 cents for the first quarter; analysts polled by Thomson Reuters were expecting on average 24 cents. Its full-year earnings prediction of $1.12 to $1.18 a share bracketed Wall Street’s $1.16 average estimate.

    "We’re hopeful that Xerox has injected a healthy dose of conservatism into the 2012 guidance, given headwinds from macro and [foreign exchange]," Brean Murray Carret & Co. analyst Ananda Baruah said in a note to clients.

    In the latest period, sales of printers, supplies and other items fell 4.7%, mainly because of weakness in Europe. But Xerox gained market share in such equipment as installations of its gear rose 8%, Chief Executive Ursula Burns said in a statement. Revenue from services offerings increased 5.6%.

    Xerox reported a profit of $375 million, or 26 cents a share, up from $171 million, or 12 cents a share, a year ago. Excluding restructuring charges and other items, earnings rose to 33 cents a share from 29 cents, in line with the company’s forecast of 32 cents to 35 cents.Revenue edged down 0.2% to $6 billion, missing analyst expectations for $6.07 billion.The company bulked up its services business two years ago with its $6.4 billion purchase of Affiliated Computer Services Inc., its largest-ever takeover.

    http://www.lanereport.com/articles/fastlane_article.cfm?id=xerox_retires_the_acs_name_company_has_5000_kentucky_employees
    Xerox retires the ACS name; company has 5,000 Kentucky employees
    Xerox Retires the ACS handle: a Texas name rides into the sunset

    Jan  2012 – At Xerox, we tend to walk the walk.If you do business with us, you likely hear us talk about how we can simplify your business. We aim to make our clients’ lives easier by streamlining things they do behind the scenes – like processing credit card applications and insurance claims, converting paper files to digital, managing payment systems, staffing call centers, printing millions of documents and handling millions of transactions (even those E-Z Pass ones). And lots more.

    We simply strive to make business life easier.

    A couple of years ago, we acquired Affiliated Computer Services, or ACS, to broaden our business. While we were talking to our clients about transforming their operations, we didn’t hesitate to take the bold step to transform ours by deepening our expertise in the business process and information technology services world.

    Headquartered in Dallas, ACS was this big company with a quiet presence. We turned up the volume. During our transformation, we learned that the Xerox brand, known around the world, is a great asset for ACS. We increasingly see the value of going to market as one Xerox, one voice, demonstrating to clients that our services-led, technology-driven strategy offers value through the very strength of our brand.

    So, we took another step today. We’re retiring the ACS name. It won’t happen overnight but it also won’t happen over too much time. We’re moving on it.

    It will now be simpler for our clients to refer to us and to understand what we can do for their business. It will be simpler for them to understand that we provide business process outsourcing services. It will be simpler for them to understand that we offer information technology outsourcing services. And it will be very easy for them to understand that we also do document management.Because now, we’re simply known as Xerox.

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