Xerox Matches Profit Expectations, But Provides Downbeat Outlook

Document management company Xerox Corp. reported on Friday a second-quarter net profit that dropped to $12 million, or 1 cent a share, from $266 million, or 22 cents a share, in the same period a year ago. Excluding non-recurring items, such as software impairment charges, adjusted earnings per share came in at 22 cents, matching the FactSet consensus. Revenue declined 7% to $4.59 billion, just below the FactSet consensus of $4.64 billion, as services revenue fell 3% and document technology revenue declined 12%. Xerox expects third-quarter adjusted EPS of 22 cents to 24 cents, below the FactSet consensus of 25 cents. For the full year, adj. EPS is expected to be at the "lower end" of 95 cents-to-$1.01 range, compared with the FactSet consensus of 98 cents. "We are intensely focused on improving our services margin and are implementing restructuring actions and prioritizing investments to accelerate benefits from our new operating model," said Chief Executive Ursula Burns. The stock, which was still inactive in premarket trade, had dropped 22% year to date through Thursday, while the S&P 500 has gained 2.1%.