Xerox hikes sales targets, corporate services grow
NEW YORK (Reuters) - Xerox Corp (XRX.N) said it would boost sales as much as 6 pct by 2012 with corporate services leading the way, sending its shares higher.
Xerox, best known for its printing products, has shifted to become a more services-based company. More than half of its revenue comes from a range of services, ranging from managing the parking meters in the city of Indianapolis to supporting the ballpark operations for the New York Mets baseball team.
Xerox expects revenue to increase 4 percent to 6 percent by 2012, with earnings per share at $1.18 to $1.28 that year, the company said at its investor day on Tuesday. Analysts' average 2012 earnings forecast is $1.23 per share, according to Thomson Reuters I/B/E/S.
Xerox expects to generate $2.6 billion to $2.9 billion in cash from operations in 2012.
"We're going to expand our earnings and throw off some free cash," Chief Executive Ursula Burns told investors in New York.
Executives said Xerox aims to use 70 percent of its available cash to buy back shares for the next two years.
For 2011, the company maintained its full-year earnings outlook of $1.05 to $1.10 per share. Analysts' average estimate is $1.08.
In the first quarter, Xerox had more of its revenue come from its services business than from hardware sales.
The company said a higher percentage of revenue will come from its services business, and that business is expected to grow 6 percent to 8 percent by 2012.
"All our interactions with clients now start with services," Burns said.
The company's technology business, which focuses on selling Xerox products such as copiers and printers, should increase 1 percent to 3 percent by 2012, with growth driven by demand for color pages.
The company, which made a major move when it bought services company ACS in 2009 for $6.4 billion, said it would invest about $300 million in acquisitions this year. It said this should boost revenue by 1 to 2 percentage points.
"We are investing so we know we stay ahead of the curve and don't fall behind," said Burns.
Xerox shares were up 10 cents to $10.28 in morning trade on the New York Stock Exchange.
(Reporting by Liana B. Baker; Editing by Maureen Bavdek and John Wallace)
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