Tags: US | Earns | Xerox

Xerox to Cut 2,500 Jobs After Profit Doubles

Thursday, 21 Oct 2010 09:02 AM

Xerox Corp. said Thursday it doubled its profit in the third quarter, helped by surging demand for its copying equipment and double-digit growth in service contracts that is being fueled by its recent acquisition of Affiliated Computer Services.

As it looks to wring more cost savings out of the $6 billion acquisition of ACS, Xerox said Thursday it plans to eliminate 2,500 jobs, or about 2 percent of its 133,000-person work force, over the next year. That comes on top of a separate 2,500 job cut Xerox announced back in January.

Xerox reported net income of $250 million, or 17 cents a share, for the quarter, compared with $123 million, or 14 cents a share, a year ago. Excluding one-time items, adjusted income was 22 cents per share.

Revenue rose 48 percent to $5.43 billion, mainly because of the ACS acquisition. Had results from ACS been included in last year's third quarter, revenue this year would show a 2 percent increase.

The quarter came out mixed as far as Wall Street expectations. Earnings came in a penny above analyst projections of 21 cents a share, according to Thomson Reuters, but revenue fell slightly short of expectations for $5.45 billion.

Xerox shares rose 14 cents to $11.23 after the market opened Thursday.

The company has transformed itself with its deal for ACS, tripling the size of its services business. ACS handles a wide range of outsourcing jobs, from managing electronic toll payments to processing health care records. The deal has shown some early signs of success. Xerox's bookings for service contracts in the most recent quarter jumped 26 percent.

At the same time, the company's traditional office equipment business is rebounding from a severe drop-off during the recession. Equipment sales climbed 13 percent over the same quarter a year ago.

The Norwalk, Conn., company says that based on its momentum, it's raising its outlook for both this year and 2011.

For the full year, the company expects adjusted earnings of 92 cents to 93 cents per share, up from a previous forecast of 88 cents to 92 cents. Analysts were looking for 93 cents.

Because of the job cuts, Xerox said it will take an extra $120 million in restructuring charges this year on top of $250 million already announced.

And for 2011, Xerox projected full-year adjusted earnings of $1.05 to $1.10 per share, up from 95 cents to $1.05. Analysts expect $1.07.

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Xerox Corp. said Thursday it doubled its profit in the third quarter, helped by surging demand for its copying equipment and double-digit growth in service contracts that is being fueled by its recent acquisition of Affiliated Computer Services. As it looks to wring more...
US,Earns,Xerox
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2010-02-21
Thursday, 21 Oct 2010 09:02 AM
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