Due to strong currency swirls and softer signings, Xerox Corp (NYSE:XRX) lowered its earnings forecasts for the whole year and also expects lower gain in earnings for the ongoing quarter.
Fresh estimates by Xerox dictates adjusted earnings of 95 cents to $1.01 a share for the current year, below from its earlier expectations of $1 to $1.06 a share. Excluding impact of currency fluctuations, Xerox will expect a drop of 1% in its turnover, as previously it had forecast a steeper decline in its revenue.
Xerox expects earnings to be 21 cents to 23 cents a share for the current quarter below the analysts’ estimates of 25 cents a share, surveyed by Thomson Reuters.
Xerox for long time is renowned for its paper copiers and printers, but now the company wants to serve in the fields of document management, bill processing and IT outsourcing services for which the company has been muscling up its efforts. Recently it procured Consilience Software, a health-care case-management software provider, employed by the government organizations.
But the company’s graph doesn’t allow it for such transformations as demands for its printers and copiers continue to fall and the considerable amount of money is utilized for expansion of services business by the company. Volatility in currency rate especially the weakening of Euro dents the company’s revenue margins. So it is big challenge for company to transform into such areas under such circumstances.
Xerox profit fell $225 million, or 19 cents a share, in the first quarter ended March 31, down from $281 million, or 23 cents a share in a year earlier period. Earnings were 21 cents a share without considering special items.
Revenue dropped 6.3% to $4.47 billion, valuing below the analysts’ estimates of $4.56 billion.
Revenue of company’s service business, which accounts for 56% of the total revenue, slumped 3% to $2.5 billion. Xerox document-technology unit’s revenue fell 10% to $1.8 billion.
