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of second-quarter earnings

Xerox stock jumps on news
of second-quarter earnings

Xerox Corp. stock was pumped up in heavy trading today, as news of the firm’s double-digit earnings gain hit Wall Street.
Sales for the document-processing segment marked a modest 4 percent upswing for the second quarter ended June 30.
Xerox reported a 15 percent hike in net income for its document-processing business, climbing to $293 million or 85 cents a share for the three-month period. Fully-diluted earnings per share were 81 cents, up from 70 cents a year ago.
Document-processing revenues rose to $4.2 billion, up from $4.1 billion last year.
The good news drove Xerox stock near the $50 mark by midday, up sharply from a Wednesday close of $46.50.
Total revenues were up 6 percent, spurred by a 9 percent increase in end-user equipment sales and a hefty 51 percent boost in the firm’s document-outsourcing business. Service revenues were down slightly, in part because Xerox is diverting some of that business to the outsourcing segment.
U.S. revenues were up 6 percent, while sales for Rank Xerox Ltd.–battered by weak economies in France and Germany–fell 2 percent. Latin American operations jumped 18 percent, buoyed by strong sales in Brazil.
Sales from the firm’s digital products, representing 29 percent of total revenues, increased 29 percent during the quarter. Black-and-white copier revenues were flat, accounting for 57 percent of total revenues.
Employment dropped by 100 to 86,600, a combination of overall reductions offset by an increase of 800 sales reps and staff for the document-outsourcing business.
“Continuing strong sales of DocuTech and color products resulted in excellent overall growth in our enterprise printing revenues,” CEO Paul Allaire said. “Our new DocuColor40, a 40-page-a-minute full-color document-production system, is selling faster than we can currently supply it.”
Allaire said that expenses grew faster than revenues during the quarter, as Xerox continued to invest in increased sales coverage for the document-outsourcing business and in accelerated product development.
“During the balance of the year, our objectives are to capitalize on these investments, continue to improve gross margins, and ensure that selling, administrative and general expense growth does not exceed revenue growth.”
For the first half of 1996, Xerox reported document-processing income of $530 million, or $1.53 a share, compared with $441 million or $1.27 a share for the first six months of 1995. Fully-diluted earnings were $1.46 a share, up from $1.21 a share for the first half of 1995.
Revenues were $8.1 billion for the period, up from $7.8 billion a year ago.
Xerox also reported that by June 30 it had repurchased 4 million shares of common stock for $182 million. In February, the board of directors authorized the repurchase of up to $1 billion of Xerox common stock.
The firm expects to close the sales of its insurance units–Talegen Holdings Inc. and The Resolution Group Inc.–during the third quarter.
Xerox’s Web site is http://www.xerox.com.

Xerox stock jumps on news
of second-quarter earnings

Xerox Corp. stock was pumped up in heavy trading today, as news of the firm’s double-digit earnings gain hit Wall Street.
Sales for the document-processing segment marked a modest 4 percent upswing for the second quarter ended June 30.

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