Xerox profit beats Street, shares rise

Markets Reuters

By Liana B. Baker

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Xerox

Xerox, which provides services from managing payrolls to data analytics, said services contributed more revenue than its traditional copier and printer business in the quarter.

The company, whose shares rose 3 percent in pre-market trading, said it expects fourth-quarter earnings of 32 cents to 35 cents per share, in line with analysts' estimates, according to Thomson Reuters I/B/E/S.

It expects full-year earnings of $1.08 to $1.11 per share, which is also in the range of what analysts are expecting.

Xerox, which also provides services such as managing the E-ZPass electronic tolling system in several states, is getting better at signing new business that provides recurring revenue and is not depending corporate spending on new copiers or printers as it had in the past, analysts said.

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The company said signings for services, which are estimated future revenues from contracts signed in the quarter, rose 33 percent to $3.9 billion.

"Many of Xerox's deals are tied into multiyear contracts, which shields them from global macroeconomic uncertainty," said Gabelli & Co analyst Hendi Susanto.

While Xerox is expanding the services side of its business, it said it employed 2,300 fewer workers than last year due to restructuring. Xerox had 134,200 employees at the end of September.

Xerox reported earnings per share of 22 cents, up from 17 cents a year earlier, based on net income of $320 million, up from $250 million.

Adjusted for various charges, Xerox said it earned 26 cents per share, which beat Wall Street's expectations of 25 cents.

Revenue was boosted by 2-percentage point impact from the stronger U.S. dollar.

Earlier in October, Xerox competitor IBM reported results that stoked concerns about lackluster corporate IT spending and dragged down its shares.

(Reporting by Liana B. Baker; Editing by Derek Caney and Ted Kerr)

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