Xerox Q2 Profit Down, Adj. Earnings Top Estimates; Backs Full-year View

(RTTNews) - Document technology and business process services provider Xerox Corp. (XRX) Thursday reported a lower second-quarter profit, despite a marginal growth in revenues. Adjusted earnings topped analysts' expectations, while revenues missed view. The company issued earnings per share guidance for the third quarter and confirmed its full-year 2013 view.

In the second quarter, net income attributable to the company declined to $271 million or $0.21 per share from $309 million or $0.22 per share reported last year. Earnings from continuing operations for the second quarter of 2013 was $0.23 per share.

Xerox said it recently completed sale of its North American paper business to Domtar Corp., and entered into an agreement to sell its European paper business to Antalis. Beginning with the recent second quarter, the firm reported results from these businesses as discontinued operations. The company has restated the prior-period results to reflect the change.

Excluding amortization of intangibles assets of $0.04 per share, adjusted earnings for the recent quarter was $0.27 per share, while the firm posted $0.26 per share last year.

On average, 10 analysts polled by Thomson Reuters expected earnings per share of $0.24 for the quarter. Analysts' estimates typically exclude one-time items.

Total revenues edged up 1 percent to $5.40 billion from $5.37 billion in the prior year. Analysts estimated revenues of $5.50 billion for the quarter.

Revenues from Services business improved 5 percent, and represented 55 percent of Xeroxs' total revenue. Services segment comprises three service offerings: Business Process Outsourcing, Document Outsourcing and Information Technology Outsourcing.

Service revenue included 4 percent growth from business process outsourcing , 6 percent increase in document outsourcing and 13 percent growth from IT outsourcing.

Meanwhile, revenue from the company's document technology business declined 5 percent from a year earlier.

Total costs and expenses were $5.07 billion, slightly up from $5.02 billion in the preceding year.

Operating margin was 9.4 percent, down 0.5 points year-over-year.

Looking ahead to the third quarter, Xerox expects earnings from continuing operations to be $0.20 to $0.22 per share and adjusted earnings of $0.24 to $0.26 per share. Analysts expect the company to earn $0.26 per share for the quarter.

For full-year 2013, the company continues to expect earnings per share from continuing operations in the range of $0.94 to $1.00, and adjusted earnings per share of $1.09 to $1.15.

Analysts are looking for earnings of $1.10 per share for the year.

XRX is currently trading at $9.91, up 0.77 percent.