| NEW YORK
NEW YORK Small, tuck-in acquisitions and a growing services business will boost revenue and profit margins for Xerox Corp (XRX.N), which is in the midst of trying to shed its stodgy image as a printer and copier company, its chief executive said.
Ursula Burns, a mechanical engineer by training who was named CEO in July 2009, said Xerox earmarked between $350 million and $400 million for acquisitions such as companies with specialty analytic capabilities or healthcare technologies.
Burns ruled out any major purchases comparable to its buy of Affiliated Computer Services Inc (ACS) for $5.5 billion in 2009, which moved Xerox into the outsourcing business in what was the company's biggest deal in its 106-year history.
The move was viewed as a strategic gamble and despite growth in the services business, Xerox has been at pains to prove it was a smart step similar to IBM's (IBM.N) acquisition of consulting firm PricewaterhouseCoopers (PWC) in 2002.
"We spend a lot of time thinking about IBM, studying them" Burns said, adding that it took IBM a number of years until it sunk in that the company did much more than sell mainframes after it bought PWC and that it would take Xerox some time as well.
"I'm wildly impatient about most things in the world. I'm slightly more patient about this," Burns said.
Xerox derives more than half its revenue from its services segment which includes processing credit card applications, managing toll systems and unemployment benefit provisions for states.
"We have to grow this services business without doubt around it with continuous revenue growth and predictable margins...so that people see yeah they are really in this business," Burns said.
Burns, who started at Xerox as an engineering intern, said she was frustrated with the company's share price.
"How the hell can we be trading at $7 a share? I wish somebody could tell me that. I think we should be trading for twice that," Burns said.
Xerox shares closed down 0.13 percent at $7.62 on Thursday. By comparison, IBM stock closed at $195.10.
However, Burns said since the ebb and flow of the market was beyond her control she was focused on managing performance.
The goal was to grow the services segment in a high single digit range and to keep the technology business flat or at a modest decline this year, Burns said.
Growth areas were the different areas of healthcare, finance and accounting businesses as well as transportation from traffic cameras to toll systems and customer care.
Asked if economic concerns would impact the business, Burns said that "I am very confident we have an outlook for 2012 that comprehends not a very buoyant economy" and added that the company was well versed in handling economic disruption.
Burns said that there would be no massive layoffs although there would be adjustments "around the edges".
(Additional Reporting by Jim Finkle; Editing by Bernard Orr)