Xerox Earnings Meet Revised Outlook

By THE ASSOCIATED PRESS
Published: April 24, 2009
The Xerox Corporation met lowered expectations for first-quarter earnings Friday, but said slower spending on printing equipment and supplies continued to hurt sales, a trend the company projected to continue for at least the next few months.

The company earned $42 million, or 5 cents a share, in the quarter, topping Wall Street forecasts by a penny, according to Thomson Reuters.

That is in contrast to a loss of $244 million, or 27 cents a share, a year ago, when a litigation charge pushed the company to a loss.

Xerox said the global downturn kept information technology budgets tight and inventory among distributors thin. Revenue fell 18 percent, to $3.55 billion, from $4.34 billion. Analysts expected revenue of $3.54 billion, on average.

In a conference call with analysts, the chief executive, Anne M. Mulcahy, tamped down expectations for a quick recovery. “People are going to manage with less for some time to come,” she said. “We’re not counting on a return to the past in any way.”

Instead, Xerox has been cutting costs, looking to save $550 million in 2009 though layoffs announced last year and other expense cuts.

The company said in October it would cut 3,000 jobs and announced in March it was suspending its 401(k) matching plan in the United States, freezing salaries and trimming discretionary spending like travel and overtime.

Xerox also cut its debt load by $485 million in the latest quarter and planned to reduce overall debt by $1 billion this year.

The company said equipment sales fell 30 percent to $770 million. So-called postsale revenue, which includes the sale of ink and other supplies to companies that already own or lease Xerox machines, fell 14 percent, to $2.78 billion.

Shares of Xerox, which is based in Norwalk, Conn., rose 20 cents, to $5.94.