| Xerox stands by guidance on earnings |
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| Date:2010-08-12 |
| By Vanessa Valkin in NewYork and Mary Watkins in London Xerox, the US copier maker, was on track to deliver on its full-year earnings guidance and expected a strong second-half performance, Anne Mulcahy, the chief executive, said on Monday. Her optimism comes despite economic uncertainties and a slight drop in Xeroxs net income in the second quarter. "We remain committed to our full-year guidance of 50-55 cents per share which . . . excludes the previously recognised litigation and credit facility-related charges," Ms Mulcahy said. "We are confident we are executing at the higher end of that range which reflects stronger second-half operational performance." Ms Mulcahy, who has overseen deep restructuring at Xerox, was encouraged by improved sales in targeted growth areas such as advanced printers and colour copiers. Total equipment sales grew 8 per cent, and Ms Mulcahy said the group was positioned to improve sales in its growth markets "yielding strong results for the full year". The news sent Xeroxs shares up 4 per cent to $11.16 in early New York trading on Monday. The company said it expected to earn 8-12 cents a share in the third quarter, traditionally a weaker quarter. Xerox reported a 1 per cent drop in second-quarter net income to $86m, or 9 cents a share, from $87m, or 11 cents a share, a year ago. It said the decline was mainly due to falling sales from the companys older light lens technology and declines in its developing markets business. The second-quarter figure included a previously announced 5 cents a share charge because of fees to terminate its 2002 credit facility. Last month Xerox announced a $3.6bn recapitalisation plan with sharply improved terms compared with the package of loans it agreed in June 2002, including a new $1bn credit facility, $1.34bn of new equity and $1.25bn of senior unsecured notes. The plan shaves $2.5bn off its debt pile. Total sales for Xerox during the period were down 1 per cent year-on-year at $3.92bn. Ms Mulcahy said strong sales in targeted growth areas such as office digital products were "directly aligned" to the groups growth strategy. This year the company introduced cheaper products and cut the price of existing products by 10 per cent in an effort to regain ground it had lost to Japanese competitors like Canon and Ricoh. |
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