Document technology and business process services provider Xerox Corp. (XRX: Quote), Friday lowered its earnings per share outlook for the full year 2012, as it currently expects continued weak revenue from its technology business. The company reported a lower second-quarter profit, reflecting revenue decline in its slowing technology business. On a per share basis, earnings met analysts' expectations, while revenues missed their view.
In the Technology business, revenues decreased 7 percent to $2.37 billion, including a 3-percentage point negative impact from currency. Revenues declined 4 percent at constant currency.
Meanwhile, revenues from the company's services segment increased 5 percent and was up 7 percent at constant currency. Services revenue comprised 51 percent of total revenue in the quarter and technology revenue 43 percent.
Ursula Burns, chairman and chief executive officer of the company said, "Our second-quarter results reflect solid progress with 8 percent growth from business process outsourcing, 9 percent growth from IT outsourcing and 6 percent growth in document outsourcing, all at constant currency."
In the second quarter, net income attributable to the company declined to $309 million from $319 million in the previous year. On a per share basis, earnings remained flat at $0.22.
Excluding $0.04 per share related to amortization of intangibles, adjusted earnings per share were $0.26, lower than $0.27 in the prior-year quarter. On average, 8 analysts polled by Thomson Reuters expected earnings per share of $0.26 for the quarter. Analysts' estimates typically exclude one-time items.
Total revenues for the quarter declined 1 percent to $5.54 billion, which also came in below analysts' estimate of $5.59 billion. Revenues were up 1 percent at constant currency.
Operating margin was 9.7 percent, down 0.7 points from the preceding year.
Looking ahead to the third quarter of 2012, earnings per share is estimated to range between $0.20 and $0.22 on a GAAP basis. On an adjusted basis, earnings are expected to be in the range of $0.24 to $0.26 per share. Eight analysts currently anticipate third-quarter earnings per share of $0.27.
For full-year 2012, the company now sees earnings per share of $0.92 to $0.97, and adjusted earnings per share of $1.07 to $1.12. Analysts are looking for earnings of $1.11 per share for 2012.
Earlier, the company projected earnings per share of between $0.97 and $1.03 and adjusted earnings in the range of $1.12 to $1.18 per share.
Xerox also plans to repurchase $900 million to $1.1 billion in stock during the year.
XRX is currently trading at $6.96, down $0.23 or 3.2 percent, on a volume of 3.79 million shares on the NYSE.
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by RTT Staff Writer
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