Xerox Cuts Net Earnings Outlook Because Of Software Impairment Charge

Xerox Corp. said on Friday it will record a software impairment charge of $145 million in the second quarter, after making changes to its government healthcare solutions strategy. As a result of this charge, Xerox cut its second-quarter net earnings-per-share outlook to range of 9 cents to 11 cents from 17 cents to 19 cents, but kept its adjusted EPS outlook at 21 cents to 23 cents. Following a review of its health enterprise Medicaid platform implementations and future market opportunities, the company said it will discontinue investment and sales of its integrated eligibility system. "We continue to refine our strategy and take the necessary actions to position our Services business for better revenue growth and margin improvement," said Chief Executive Ursula Burns. The stock, which slipped 1.2% in light premarket trade, has shed 23% year to date through Thursday, while the S&P 500 has gained 3.2%.