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Xerox Posts Loss Despite Cost Cuts

July 26, 2001|From Reuters

Xerox Corp. on Wednesday reported another quarterly loss and said that although cost-cutting efforts are ahead of plan, the weak economy probably will delay its return to profitability to the fourth quarter.

The Stamford, Conn.-based office equipment company said its operating loss for the second quarter was $68 million, or 10 cents a share, meeting the average estimate of analysts polled by First Call/Thomson Financial, compared with year-earlier profit of $201 million, or 27 cents.

Sales fell 13% to $4.14 billion, about $400 million short of some analyst estimates.

Xerox has lost ground in recent years from tough competition and its own operational blunders. This year, it has struggled to put behind it concerns about accounting practices and charges of discrimination by some employees.

With a goal of turning a profit for the full year, the company has reorganized its operations, cut staff and trimmed spending, including suspending its quarterly dividend for the first time in 53 years.

"We continue to expect a return to profitability in the second half of 2001," President and Chief Operating Officer Anne Mulcahy said. "But the economic environment and normal third-quarter seasonality will likely delay this to the fourth quarter."

The company said that including restructuring charges and one-time gains, its loss was $281 million, or 40 cents a share, in the latest quarter.

As the sour economy continues to force customers to rethink equipment purchases, Xerox sales could remain an area of concern, analysts said.

Shares of Xerox fell 40 cents, to $7.59, on the New York Stock Exchange.

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