After announcing a fourth-quarter loss slightly worse than Wall Street expected, Xerox Corp. officials Monday morning tried to paint a picture for analysts of a company on the mend. The company said it would continue to pursue aggressive cost-cutting plans, including reducing its worldwide work force by 4,000 in the first quarter and transferring some manufacturing operations out of Webster.
Xerox officials paint upbeat picture
After announcing a fourth-quarter loss slightly worse than Wall Street expected, Xerox Corp. officials today tried to paint a picture for analysts of a company on the mend.
In a conference call with analysts, Chairman and CEO Paul Allaire called the fourth-quarter results “in line with expectations,” and promised 2001 would end with Xerox in the black.
The company also said it would continue to pursue aggressive cost-cutting plans, including reducing its worldwide work force by 4,000 in the first quarter and transferring some manufacturing operations out of Webster.
In early afternoon trading, Xerox’s stock price (NYSE: XRX) had risen 11 percent to $7.63 a share.
For the fourth quarter, the document company reported a loss of $198 million, or 31 cents a share. The loss does not include a gain of 18 cents a share on the $550 million sale of its China operations.
The fourth-quarter results put Xerox’s losses a penny higher than Street estimates.
Full-year 2000 results showed the document company with a $117 million, or 12 cents a share, profit, excluding onetime write-offs and other extraordinary items. Those special items pulled Xerox $384 million, or 63 cents a share, into the red.
Allaire said the company is on track in its “prime objective” of generating cash. But both Allaire and President and chief operating officer Anne Mulcahy stressed the company’s expected gains.
Analysts have fretted over competitors’ gains against Xerox’s most profitable high-end lines. But Mulcahy said that in the third and fourth quarters, Xerox had stabilized or expanded its U.S. and European market shares in black-and-white copiers, beating back challenges by Canon Inc., Heidelberg Digital LLC and Ricoh Co. Ltd.
Mulcahy said more important are Xerox’s strong gains in high-end color equipment and expected gains in the production and printing markets when it comes out with the FutureColor digital press. The document company previewed the new press at last year’s DRUPA trade show in Germany.
While it cut spending virtually across the board, the document company increased research and development investment by 11 percent in 2000, and Xerox plans a series of new color and multifunction digital products this year, Allaire said.
Xerox racked up a 17 percent gain in sales of DocuColor equipment in the fourth quarter, and was ahead of projections for the year by some 400 units, he said.
Mulcahy acknowledged Xerox has seen little competition yet in the growing color market, but insisted it would keep its edge.
Given competitors’ advances in the market, some analysts asked whether Xerox is prepared for the arrival of competition.
“How do we know (Xerox) won’t be in the same position in the fourth quarter of 2001 with color as (it was) in the fourth quarter of 2000 with black and white?” asked Morgan Stanley Dean Witter Co.’s Rebecca Runkle.
Countered Mulcahy: “We looked at all the what-ifs.”