XEROX Q3 PROFIT FALLS 52% DUE TO WEAK DEMAND

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http://online.wsj.com/article/SB10001424052748703816204574488933558487924.html
XEROX Q3 PROFIT FALLS 52% DUE TO WEAK DEMAND
 Xerox
Corp.’s third-quarter profit fell 52% as the office-equipment company
posted lower revenue and said it hadn’t seen a meaningful shift toward
increased spending on technology.”For many of our business
clients—small to large—there remains a hesitancy to invest until more
economic factors show signs of steady improvement,” Chief Executive
Ursula Burns said in a statement. “We expect this trend will continue
to put pressure on revenue for the balance of the year.”The company
projected fourth-quarter earnings of 20 cents to 22 cents a share. But
despite the warning of revenue pressure, Xerox also raised its
full-year forecast to 55 cents to 57 cents a share from its July
outlook of 50 cents to 55 cents.

The recession has exacerbated
weak demand for printers, and results have been muted by a stronger
dollar as much of its revenue comes from overseas. In a bid to seek new
markets as its traditional lines of business lose steam, Xerox recently
agreed to buy business-software provider Affiliated Computer Services
Inc. in a deal valued at $5.6 billion.Xerox on Thursday posted earnings
of $123 million, or 14 cents a share, down from $258 million, or 29
cents a share, a year earlier. The company in July projected earning 10
cents to 12 cents a share.

Revenue dropped 16% to $3.68 billion.
The revenue decline was attributed to world-wide economic
weakness.Gross margin improved to 39.8% from 39.2% amid restructuring
and other cost cuts.Equipment sales fell 29%. But revenue for service,
supplies and rentals dropped 11%,.The company said it cut debt by $938
million so far this year and is on track to reduce total debt by $1
billion this year.

[Author]

October 23, 2009 at 10:47 AM