* Sees first-quarter adjusted profit $0.23-0.25/share vs est
* Fourth-quarter revenue $5.57 bln vs est $5.64 bln
* Shares down 2 pct
(Adds details from conference call, updates share movement)
Jan 24 Xerox Corp, best known as a maker
of printers and copiers, reported weaker-than-expected quarterly
revenue as growth in its services business stalled.
The services division, which manages businesses ranging from
toll systems to healthcare programs, failed to register growth
for the first time since 2009, when Xerox entered the business
by buying Affiliated Computer Services Inc.
The company has been focusing on the business, which brings
in 55 percent of its revenue, as cost-conscious companies print
less and personal computing moves to tablets and smartphones,
putting pressure on its traditional printer and copier business.
Revenue from business process outsourcing dropped 3 percent
in the fourth quarter because of the loss of a high-margin
federal contract to handle student loans last year and weakness
in its customer care business, Chief Financial Officer Kathy
Mikells said on a conference call.
Growth in IT outsourcing slowed as Xerox won fewer deals in
Services revenue is expected to grow by about 1 percent in
the current quarter, driven by BPO as the business signs on more
customers and as the company closed its acquisition of
Germany-based customer care services provider Invoco Holding
GmbH last week, Mikells said.
The company's operating margin shrank 1.3 percentage points
to 9.3 percent in the fourth quarter as it had to spend more
than expected to set up Medicaid management platforms and
healthcare exchanges, and the loss of the student loan contract
Mikells said Xerox set up Medicaid management portals for
New Hampshire and Alaska and healthcare exchanges for Nevada,
among others, last year.
Revenue from its printing business dropped 6 percent to $2.4
billion in the quarter ended Dec. 31. The services business
generated $3.0 billion in revenue.
Total revenue dropped 3.4 percent to $5.57 billion.
Net income from continuing operations attributable to Xerox
slipped to $310 million, or 25 cents per share, from $334
million, or 26 cents per share, a year earlier.
Excluding items, the company earned 29 cents per share.
Analysts on average had expected earnings of 29 cents per
share on revenue of $5.64 billion, according to Thomson Reuters
The company also forecast adjusted earnings per share from
continuing operations of 23-25 cents per share for the three
months to March 31, which was largely in line with analysts'
average estimate of 24 cents per share.
Xerox shares were down 2 percent at $11.50 on the New York
Stock Exchange on Friday.
(Reporting by Sruthi Ramakrishnan in Bangalore,)