Why Xerox Is Struggling

Sales turmoil mars its turn toward digital technology

Xerox Corp. President and Chief Executive G. Richard Thoman is a big-picture guy. For the past two years, he has preached a digital revolution at the copier giant. Get down to the details, though, and it's clear that the revolution isn't going as planned: In both copiers and printers, Xerox is losing ground. On Oct. 18, the company is expected to announce flat revenues for the third quarter and a drop of up to 12% in earnings per share compared with the same period last year, to about 47 cents. An early warning sent Xerox shares, already well off their recent high of 60 in July, tumbling 24%, to 32 1/2 on Oct. 8.

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