Xerox Q2 Profit Slides, Lifts Full Year EPS Outlook

(RTTNews) - Printer and copier maker Xerox (XRX) Friday said second-quarter profit declined marginally from the prior year, while adjusted earnings were in line with last year. Further, the company raised the lower end of its full year earnings forecast.

Net Income Attributable to Xerox edged down to $266 million from $271 million in the previous year. Earnings per share rose to $0.22 from $0.21.

Net income from continuing operations was $270 million or $0.22 per share, compared to $294 million or $0.23 per share last year. Excluding $0.05 related to amortization of intangibles, adjusted earnings per share were $0.27, flat with last year.

On average, 11 analysts polled by Thomson Reuters expected the company to report profit per share of $0.26 for the quarter. Analysts' estimates typically exclude special items.

Total revenue slid 2 percent to $5.292 billion from $5.391 billion last year. Revenue slipped 3 percent in constant currency. Analysts expected revenue of $5.31 billion for the quarter.

In revenues, sales declined 7 percent to $1.359 billion, while Outsourcing, maintenance and rentals generated $3.835 billion, unchanged from last year.

Operating margin improved 0.3 points year-over-year to 9.7 percent.

Revenue from the company's Services business, which represented 57 percent of total revenue, rose 2 percent to $3.0 billion. Xerox said revenue growth and margin are trending well in commercial services, document outsourcing and internationally.

However, services segment margin improvement was muted by continued pressure in government healthcare business including unplanned impairment charges.

Revenue from the Document Technology business, which represented 40 percent of total revenue, was $2.1 billion, down 6 percent from last year.

Ursula Burns, Xerox chairman and chief executive officer, said, "The second quarter demonstrates progress in executing on our strategy... Our Document Technology business continues to deliver strong profitability through a disciplined and effective approach to operations."

For the third-quarter 2014, Xerox expects earnings per share to be $0.21 to $0.23 per share. Third-quarter adjusted earnings per share is expected to be $0.25 to $0.27. Analysts expect the company to report third-quarter earnings per share of $0.26.

The company expects full-year 2014 earnings per share of $0.92 to $0.96 and full-year adjusted earnings per share of $1.09 to $1.13. Analysts look for full year earnings per share of $1.10.

The forecast issued in April expected 2014 earnings per share of $0.90 to $0.96 and adjusted earnings per share of $1.07 to $1.13.

XRX rose 0.5 percent on Thursday to close at $12.84.