Xerox Corporation (NYSE:XRX) Doesn’t React To Lower Forecast
Xerox Corporation (NYSE:XRX), a global brand in printers and copiers business, forecasted its adjusted earnings per share to be in range of $0.28 to $0.30 per share for the 4Q13 from its continuing operations after adjusting to restructuring in its outsourcing business. The company mentioned that this guidance included around $0.04 per share on restructuring charges as well as higher pension settlement expenses.
However this forecast fell short of analysts’ estimates of around $0.33 per share, driving the share 10% down during Thursday’s trade. Moreover the company also reduced its full year FY13 guidance for adjusted earnings from $1.09 to $1.15 per share, to $1.08-$1.10 per share.
Though the forecast fell short of analysts’ expectations, the adjusted net income from continuing operations rose to $0.26 per share during 3Q13, beating the street estimates of $0.25 per share. Xerox reported better than expected profit for the 3Q13 with 3% revenue growth from business which was reported at $2.94 billion. Overall revenue remained flat at 5.26 billion.
Xerox initiated the services business restructuring program last November. The business accounts for about 56% of the company’s revenues through IT outsourcing, business process outsourcing and document outsourcing.
The Chief Executive Officer of Xerox Corporation, Ursula Burns is leading the company into consulting and services in a bid to improve profit. However, two consecutive strong quarters, the analysts are aggravated with the services revenues, margins and bookings. The 10% intraday fall in Xerox’s share prices is the biggest single day decline since September 2009, largely driven by its constrained guidance.
While discussing 3Q13 results, the Chief Financial Officer and Executive Vice President of Xerox, Kathryn Mikells commented that the company still enjoys incredibly strong position against its competitors and the recent inclusion in Gartner’s Leaders Quadrant of the 2013 for the MPS (Managed Print Services), where the company’s Document Outsourcing services resides is the testimony to the same. The CFO further added that the company is continuing to evolve through synergies between its Services business and its Document Technology business through MPS and Document Outsourcing.
To mention, the rival Japanese firm, Canon Inc. (ADR) (NYSE:CAJ) has also been placed in Gartner’s Leaders Quadrant of the 2013 for the MPS. Canon provides flexible and customized managed document solutions alongside broad portfolio of hardware, software and value-added services at offer.
The Gartner Leaders Quadrant positions vendors based on their ability to deliver successful results today and the preparation for future as well as vendor’s view of the market and strategic plans for growth and service improvements