AP News, October 19th, 2007
Xerox Inc.'s profit tumbled 53 percent in the third quarter from year-ago results boosted by a tax gain, but still beat Wall Street expectations on strong demand for its color printers and office services.
The office equipment maker said Friday it earned $254 million, or 27 cents per share, for the quarter ended Sept. 30 from $536 million, or 54 cents per share, a year ago. The 2006 figures included a tax gain of 45 cents a share partly offset by restructuring and litigation charges of 14 cents per share.
The latest results beat the 26 cents a share profit expected by analysts surveyed by Thomson Financial.
Revenue grew 12 percent to $4.3 billion from $3.84 billion a year ago, helped by the weaker dollar, rising post-sale and financing revenue, and contributions from the acquisition of Global Imaging Systems.
Post-sale and financing revenue are annuity streams that together represent more than 70 percent of Xerox's total revenue.
Analysts expected total revenue of $4.24 billion.
Its shares slipped 9 cents to $17.12 in morning trading Thursday.
"This quarter's solid results are proof positive that our business model is on track, generating double-digit profit growth and fueling a strong annuity pipeline that serves us well for the long term," said Anne M. Mulcahy, Xerox chairman and chief executive
Xerox expects fourth-quarter earnings in the range of 39 cents to 41 cents per share, and full-year earnings of $1.18 to $1.20. Wall Street has forecast quarterly profit of 41 cents per share and fiscal 2007 earnings of $1.18.
The purchase of Tampa, Fla.-based Global Imaging was intended to give Xerox access to about 200,000 new customers and increase its U.S. distribution to small- and mid-sized customers.
For the first nine months of the year, net income dropped 24 percent to $753 million, or 79 cents a share from $996 million, or 99 cents a share, in 2006.
