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Xerox Profit Slips as Sales of Copiers Slow

EARNINGS ROUNDUP

April 25, 2006|From Bloomberg News

Xerox Corp. said Monday that first-quarter profit fell nearly 5% on a higher dollar and lower sales of its most expensive black-and-white printers and copy machines.

Net income dropped to $200 million, or 20 cents a share, from $210 million, or 20 cents, a year earlier, the Stamford, Conn.-based company said. Revenue fell 2% to $3.7 billion.

Sales of printers and copiers fell 4% to $947 million. Supplies and financing, which make up about three-quarters of Xerox's revenue, declined 1%, the company said. Sales of color products and services grew 11%.

Chief Executive Anne Mulcahy is trying to bolster profit by focusing on digital technology and color machines, which lead to sales of profitable supplies such as toner and paper.

Since Mulcahy, 53, took over in 2001, Xerox has posted four straight profitable years, and 2005 net income was the highest since 1997. She has eliminated 20,000 jobs during her tenure and hired other companies to make Xerox products.

First-quarter profit included a $24-million benefit associated with an Internal Revenue Service audit. Without the benefit, earnings per share would have been 17 cents to 18 cents. The average estimate of analysts surveyed by Thomson Financial was for 21 cents a share.

For the second quarter, the company is expecting earnings per share of 22 cents to 24 cents, including 1 cent of costs related to the termination of a loan. Analysts were expecting 24 cents of profit, according to Thomson Financial.

Xerox shares fell 80 cents, or 5.4% to $14.

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