Xerox Raises Profit Forecast as It Plans 2,500 More Job Cuts
Xerox Corp. CEO Ursula Burns
Jeff Kowalsky/Bloomberg
Xerox Corp's Chief Executive Officer Ursula Burns is trying to cut costs after her $6 billion purchase of ACS, while building services and printer sales as customers resumespending after the recession.
Xerox Corp's Chief Executive Officer Ursula Burns is trying to cut costs after her $6 billion purchase of ACS, while building services and printer sales as customers resumespending after the recession. Photographer: Jeff Kowalsky/Bloomberg
Xerox Corp., the printer and business-services provider, raised its 2011 profit forecast and said it plans additional cost cuts, including the elimination of 2,500 jobs.
Per-share profit next year, excluding some costs, will be $1.05 to $1.10, compared with the previous projection of at most $1.05, Norwalk, Connecticut-based Xerox said today in a statement. Analysts had estimated $1.08 on average.
The job cuts, about 2 percent of the workforce, will come in the next 12 months, spokesman Carl Langsenkamp said in an interview. They are in addition to 2,500 positions Xerox said it would eliminate in January. The company plans $400 million in restructuring charges this year, up from its earlier projection of $280 million.
Chief Executive Officer Ursula Burns is cutting costs after her $6 billion purchase of Affiliated Computer Services Inc., while building services and printer sales as customers resume spending after the recession. Sales for the third quarter climbed 48 percent to $5.43 billion, compared with the average analyst estimate of $5.46 billion.
Net income increased to $250 million, or 17 cents a share, from $123 million, or 14 cents, a year earlier, before Xerox purchased ACS, the company said. Per-share profit, excluding some costs, was 22 cents, compared with the average estimate of 21 cents from analysts surveyed by Bloomberg.
Profit this year, excluding some costs, will be 92 cents per share to 93 cents, the company said, compared with analysts’ average estimate of 92 cents. Xerox’s adjusted per-share profit excludes items such as restructuring and acquisition costs.
Xerox gained 15 cents to $11.24 at 9:53 a.m. in New York Stock Exchange composite trading. The shares had climbed 31 percent this year before today.
The company is also using ACS services, such as automating administrative tasks, to further trim its costs. The company is on track to save more than $100 million this year as a result of the acquisition, Burns said in July. The savings may top $375 million in three years, Xerox said during an investor briefing in May.
To contact the reporter on this story: Katie Hoffmann in New York at khoffmann4@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net.
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