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Xerox shares rise after Q3 profit meets expectations

Shares of Xerox Corp. were up midafternoon following the company reporting a decrease in its third-quarter sales due largely to a drop in sales in its document technology business.

Xerox shares (NYSE: XRX) were trading around $9.90, up 3 percent from Thursday’s close of $9.57.

The company reported its third-quarter results before markets opened. The company posted net income attributable to Xerox of $181 million, or 17 cents a share, versus a net loss of $34 million, or 4 cents a share, for the same period last year. Adjusted earnings per share for the most recent quarter were 27 cents.

Sales were down 3 percent to $4.2 billion, versus $4.3 billion the year before. While its services segment revenue was up 1 percent to $2.4 billion, sales in the company’s document technology business fell 9 percent to $1.6 billion.

Analysts polled by Zack’s Investment Research had expected Xerox to report earnings per share of 27 cents on sales of $4.3 billion.

“In an important period for Xerox when our separation-related activities ramped up significantly, we delivered solid financial results despite challenging market conditions,” said Ursula Burns, chairman and CEO.

Xerox announced this year its plan to split into two publicly traded companies. Xerox will comprise the company’s document technology business; Conduent Inc. will be a business process services company. The company expects to complete its separation by year-end.

For fourth-quarter, Xerox expects earnings of 11 to 14 cents a share and adjusted earnings per share of 32 to 35 cents a share.

The company narrowed its full-year guidance for earnings per share to 45 to 48 cents a share and for full-year adjusted earnings per share to $1.11 to $1.14.

Xerox ranked as the seventh largest public company in the most recent Rochester Business Journal list based on market value. Xerox had a market value of $9.8 billion.

The company also announced Thursday it had reached a settlement with shareholder Darwin Deason granting him special shares in the copier maker’s two businesses after its split. Deason had sued the company to block its plans for spinning off the document outsourcing business, according to published reports.

Deason one of Xerox’s largest shareholders, is the founder of Affiliated Computer Services Inc., which Xerox acquired in a $6.4 billion deal in 2010. It will become part of Conduent after the split.

 (c) 2016 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail rbj@rbj.net.
 

 

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