Xerox Corp., the provider of printers and business services, said third-quarter profit fell 12 percent as demand for its equipment and supplies declined.
Net income dropped to $282 million, or 21 cents a share, from $320 million, or 22 cents, in the year-earlier period, the Norwalk, Connecticut-based company said today. Earnings excluding some items matched the 25-cent average of estimates compiled by Bloomberg.
Xerox has said it faces weaker-than-expected demand in Europe amid economic turmoil and competitive pricing. Investors have been looking for increased profitability in services, where the company is making up for declining printing revenue with contracts such as automating payments for governments or processing claims for insurers.
“Longer term they have the right strategy, they just have a few execution issues,” Alban Gashi, an analyst at Credit Suisse in New York who rates the shares neutral, said in an interview before the earnings were released. “Investors need them to draw a clearer road map for profitability.”
The shares dropped 4.8 percent to $6.69 at 4:04 p.m. in New York. Through yesterday’s close the stock had fallen 12 percent this year.
Xerox and competitors such Lexmark International Inc. are trying to redefine themselves as business-services companies as consumers choose to view documents on mobile devices rather than print them. The 2010 acquisition of Affiliated Computer Services Inc. has helped Xerox in its transition, while Lexmark has been laying off workers and exploring plans to sell its inkjet unit.
Third-quarter sales fell 2.9 percent to $5.4 billion, which included a 2 percentage point negative currency impact, according to a statement.
Services revenue advanced 4.8 percent to $2.8 billion during the period.