Xerox Posts In-Line Q1 Earnings, Lowers FY Outlook

Shares of

tumbled over 4 percent in pre-market trading after the company reported in-line earnings for the first quarter, but lowered its earnings forecast for the full year. For the year, the company now projects adjusted earnings of $0.95 to $1.01 per share, versus its prior outlook of $1 to $1.06 per share. It projects revenue, excluding currency fluctuations, to decline 1 percent. For the current quarter, the company expects earnings of $0.21 to $0.23 per share, versus analysts' estimates of $0.25 per share. The Norwalk, Connecticut-based company reported a quarterly profit of $225 million, or $0.19 per share, versus a year-ago profit of $281 million, or $0.23 per share. Excluding special items, the company earned $0.21 per share. Its revenue declined 6.3 percent to $4.47 billion. However, analysts were expecting earnings of $0.21 per share on revenue of $4.56 billion. The average estimate among 9 Estimize users was for earnings of $0.22 per share and revenue of $4.60 billion. Revenue from its services business dropped 3 percent to $2.5 billion, while revenue from document-technology business fell 10 percent to $1.8 billion. Operating margin declined 1.1 percentage points to 7.6 percent. During the quarter, the company repurchased $216 million in stock. "Our earnings are in-line with the guidance we provided," said Ursula Burns, Xerox chairman and chief executive officer. "Results in Document Technology, which included the increased impact from foreign currency, largely met our expectations. Several of our Services businesses performed well, but overall Services segment results fell short of our expectations driven by higher implementation costs in certain Health Enterprise platform accounts." Xerox shares fell 4.49 percent to $12.55 in pre-market trading.