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7 years ago
UPDATE 3-Xerox optimistic about 2010 profit,but shares slip
May 4, 2010 / 12:51 PM / 7 years ago

UPDATE 3-Xerox optimistic about 2010 profit,but shares slip

4 Min Read

* Sees FY 2010 EPS $0.37-$0.47

* Sees adjusted EPS at high end of $0.75-$0.85 view

* Sees FY rev up 1-3 pct

* Shares down 4.7 percent; up 29 pct in 2010

(Adds details from meeting; CEO comment, share moves)

By Franklin Paul and Paul Thomasch

NEW YORK, May 4 (Reuters) - Xerox Corp (XRX.N) expects cost-cutting and the expansion of its services business to drive full-year earnings to the high end of its 2010 forecast range, the company said on Tuesday.

On the same day the company hosted its first general investor meeting since closing its $6.4 billion acquisition of Affiliated Computer Services earlier this year, Xerox said earnings per share excluding items would be at the high end of its forecast range of 75 cents to 85 cents for the year.

Xerox shares, which are up nearly 29 percent this year, fell 4 percent in a broadly weaker stock market early on Tuesday, as investors fretted the crisis in Europe could derail the global economy recovery. [ID:N04101521]

At the meeting, Xerox repeated many of the financial targets it set in September when the deal was announced, but also detailed the pace of integration of ACS, which is seen as key to the future value of Xerox.

Chief Executive Ursula Burns, who completes in July her first year at the helm of the Norwalk, Conn.-based company, also used the platform to promote the transformation at Xerox, which to date is best known for its office printers.

While Xerox has long sold high-margin supplies and services that yield more profits than its printers, its has struggled to jump start total revenue, in part because its cost-conscious customers have been hurt by the economy.

The ACS deal is expected to strengthen Xerox's enterprise business, allowing it to expand from document management into outsourcing with strongholds in government and healthcare.

Burns, who adds the role of Chairman on May 20 -- replacing Anne Mulcahy who is retiring [ID:N30136577] -- said Xerox has created the industry's broadest portfolio of document technology.

"What you will see going forward is a competitively advantaged company that can grow revenue, earn more than we have earned in the past and increase cash," she said. "It (the company) looks the same ... but we are not the same company that we were, even a couple of years ago."

Xerox said the deal is on track to deliver expected cost savings, extending efforts it made on its own to become more efficient.

Back in January, the office document management company said it would cut about 2,500 jobs and take a related charge of $250 million, underscoring the tepid economy in which customers are slow to buy new equipment.

Xerox forecast 2010 net earnings per share on Tuesday in a range of 37 cents to 47 cents on proforma revenue growth in a range of 1 percent to 3 percent.

For 2011, it said full year revenue would be around $24 billion, with adjusted earnings per share of 95 cents to $1.05. Analysts expected 2011 revenue of $23.3 billion with earnings of $1.04 a share, according to Thomson Reuters I/B/E/S.

Xerox shares fell 56 cents to $10.52 in afternoon trading. The shares have already risen from below $9 since February. (Additional reporting by Sinead Carew; editing by Gerald E. McCormick, Derek Caney and Andre Grenon)

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