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Xerox Q1 2013 Misses Estimates as Document Unit Slumps
By Sarah Frier
Xerox Corp. (XRX), the printer and copier pioneer, fell the most in six months after its second-quarter profit forecast missed analyst estimates, hampered by restructuring costs and a slump in its document business.
Excluding some items, earnings will be 23 cents to 25 cents a share this quarter, Norwalk, Connecticut-based Xerox said today in a statement. Analysts had predicted 26 cents on average, according to data compiled by Bloomberg.
Xerox Chief Executive Officer Ursula Burns is shifting away from the traditional printing business and toward services, which now make up about 55 percent of revenue. Printing is declining as customers access more of their documents on computers and mobile devices. Revenue from Xerox’s document division fell 9 percent last quarter.
“Challenges in our document-technology business continued during the first quarter,” Burns said in the statement.
Xerox shares fell as much as 5.7 percent to $8.11 in New York, the biggest intraday decline since Oct. 23. Before the tumble, the stock had gained 26 percent this year through yesterday, compared with a 9.6 percent advance by the Standard & Poor’s 500 Index.
Xerox, which aims for two thirds of its revenue to come from business services by 2017, gave the forecast after its two larger rivals, International Business Machines Corp. and Accenture Plc (ACN), said demand for consulting was weak, particularly in Europe. IBM last week posted quarterly revenue and earnings that missed estimates, while Accenture forecast third-quarter sales in March that fell short of projections.
Sales Decline
Xerox’s first-quarter net income rose 10 percent to $296 million, or 23 cents a share, from $269 million, or 19 cents, a year earlier. Sales fell 2.7 percent to $5.36 billion, missing the $5.5 billion average projections of analysts.
The company said it remains on track to meet its full-year goal of $1.09 to $1.15 a share in earnings, excluding some items.
Xerox hired Kathryn Mikells as its chief financial officer last month. Mikells, 47, joins Xerox from home-security provider ADT Corp., where she was also CFO.
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