Xerox Posts Loss on One-Time Charges

April 23, 2010
Company incurs one-time expenses related to layoffs and its acquisition of Affiliated Computer Services Inc.

Xerox Corp.'s first-quarter results as well as its forecast for the current quarter topped Wall Street expectations April 23 as revenue from services and copier and printer supplies picked up.

The company's stock climbed 65 cents, or 6.2%, to $11.10 in premarket trading.

Xerox posted a loss of $42 million, or 4 cents per share, for the first three months of the year, compared with a profit of $42 million, or 5 cents per share, a year earlier. The company was dragged down in the most recent quarter by one-time expenses related to layoffs and its acquisition of Affiliated Computer Services Inc.

Excluding one-time costs, however, Xerox said it earned 18 cents per share, beating the average forecast from analysts of 13 cents per share, according to Thomson Reuters.

Revenue jumped 33% to $4.7 billion, primarily because of the ACS acquisition. On a pro-forma basis -- assuming that the deal had gone through a year ago -- revenue would be up 5%, Xerox said. Analysts expected $4.65 billion.

The increase in revenue came mainly from the addition of ACS's business outsourcing segment, which takes on a variety of back-office functions for other companies.

Xerox was already doing some outsourcing, handling the flow of documents and printer systems for other companies. But the acquisition helped Xerox more than double its first-quarter services revenue. Assuming the deal had already gone through last year, services revenue was up 3% to $1.8 billion.

Sales of copier and printer supplies also picked up as corporate spending rebounded from the depths of the recession last year, climbing 15% on a pro-forma basis.

The company's forecast for the quarter ending in June topped expectations. It expects earnings excluding one-time items of 20 cents to 22 cents per share. Analysts were looking for 18 cents, on average.

Xerox also said it expects full-year earnings at the top end of its previous forecast, which called for 75 cents to 85 cents per share, excluding items. The average forecast is for 81 cents.

Copyright 2010 The Associated Press.

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