Xerox Corp. (XRX), the printer and copier pioneer, predicted its services business will expand to two- thirds of revenue in 2017 from about half this year, helping mitigate waning demand for paper documents.
“We’ll be able to have a low-growth business shifting to a high-growth business as we get more of our revenue from services,” Chief Executive Officer Ursula Burns told investors at the company’s annual conference today. “On balance, we’re making progress, not fast enough. I’m not patient.”
The Norwalk, Connecticut-based company is moving to services like automating payments for governments or processing claims for insurers as more consumers choose to view documents on mobile devices instead of printing them. Xerox today increased its buyback plan by $1 billion, raised its dividend and provided a 2013 profit forecast range with a median that matched predictions.
The shares gained 1.4 percent to $6.42 at the close in New York. Xerox’s shares have dropped 19 percent this year as customers in slowing economies held back on spending. That compares with a 9.3 percent increase in the Standard & Poor’s 500 Index.
The company expects to allocate at least $400 million in cash for share repurchase next year, adding to the $900 million to $1.1 billion in stock buybacks planned for this year, according to a statement. Xerox boosted its dividend by 35 percent to 5.75 cents a quarter.
Restructuring expenses to improve profit in the services unit will amount to $100 million, or 5 cents a share, this quarter, Xerox said. Earnings excluding some items will total 28 cents to 30 cents a share. Analysts had predicted 32 cents, the average of estimates compiled by Bloomberg. Some of the estimates didn’t factor in the restructuring, which Xerox announced in late October.
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