Xerox Corp reports better-than-expected profit for the second quarter

Xerox Corp reports better-than-expected profit for the second quarter


Xerox Corp reported its profit for the second quarter that topped consensus forecast, as restructuring efforts paid off.

The company said that it slashed around 1,300 employees globally during the second quarter. Xerox has planned to split into two companies by separating its business process outsourcing division from its printer business.

The maker of Printer and copier said that overall costs plummeted 6 percent to $4.24 billion. This included restructuring and associated costs of $71 million, below $100 million it predicted in April. The company added that it was on track to achieve its annualized cost savings goal of approx. $700 million for the current year.

Xerox reported that it estimated one-time pretax separation expenses in between $175 million and $200 million, less than its previous forecast of $200 million-$250 million.

The company had nearly 131,800 employees as of June, down roughly 11,800 from the end of Dec.

Xerox’s overall sales plummeted for the sixth consecutive quarter as corporate clients decreased printing to curb costs and customers shift to mobile devices. The company is concentrating on its software and service divisions.

Chief Executive Officer, Ursula Burns said that document technology revenue drops moderated and margin increased, helped by cost and productivity measures.

Revenue from the company’s document technology business declined about 7 percent, though the drop slowed from 10-13 percent in the preceding four quarter. The company generates around 40 percent of its overall revenue from this business, which is its biggest.

Looking forward, Xerox expects adjusted profit in the range of 26 cents per share to 28 cents per share for the current quarter, as compared to 28 cents per share estimated by analysts surveyed by Thomson Reuters I/B/E/S.

Earnings from continuing operations climbed 45 percent to $155 million, or 15 cents per share in the latest quarter. On an adjusted basis, profit was 30 cents per share, surpassing the consensus forecast of 25 cents.

Revenue came in at $4.39 billion, down 4.5 percent from last year, but in line with analysts’ estimate.

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I handle much of news coverage for tech stocks, and occasionally cover companies in different sectors. In the past, I've written for other financial sites and published independent investment research, primarily on tech companies. I have a B.A. in Economics from Columbia University. I'm based out of San Diego, but grew up in Southern New Jersey. I play basketball and tennis in my spare time, am a long-time (and long-suffering) fan of Philadelphia's sports teams, and alternate daily between using an iPad Air, a Galaxy Note 3, and one or two Windows PCs.