January 30, 2015 / 12:08 PM / 3 years ago

Xerox cuts profit forecast again as revenue slide continues

(Reuters) - Xerox Corp XRX.N, which has been shifting its focus to IT services from making printers and copiers, cut its profit forecast for 2015 for the second time after reporting its sixth-consecutive drop in quarterly revenue.

A generic picture of a Xerox logo on a photocopier. TECOM REUTERS/Catherine Benson

Shares of the company, which also forecast lower-than-expected profit for the first quarter, were down 3 percent at $13.19 on the New York Stock Exchange in early morning trading.

The forecast cut reflected a 5 cent per share impact from currency rate fluctuations, specifically the weakening of the euro, said Xerox, which gets about a third of its revenue from outside the United States.

The euro EUR= slipped 12 percent against the dollar last year. The European Central Bank’s drastic monetary easing last week pulled the currency down against major currencies.

Xerox said it now expects an adjusted profit per share of $1.00-$1.06 for 2015, down from the $1.05-$1.11 it forecast earlier.

Analysts on average were expecting $1.09, according to Thomson Reuters I/B/E/S.

Xerox’s adjusted profit forecast of 20-22 cents per share for the first quarter fell short of an expected 24 cents.

The 110-year-old company has been moving toward services in recent years to make up for the falling sales of its copiers and printers as companies cut down on printing and personal computing moves to tablets and smartphones.

Xerox bought Affiliated Computer Services Inc in 2009 to enter the services business, including business process outsourcing (BPO), information technology services, cloud computing and data management.

Last month, the company said it would sell its IT outsourcing arm to France-based Atos SE ATOS.PA for $1.05 billion to focus on faster-growing units such as BPO and document outsourcing.

Revenue from Xerox’s services business increased 1.1 percent to $2.72 billion in the fourth quarter ended Dec. 31, while revenue from its printing business declined 8.1 percent.

Total revenue fell to $5.03 billion from $5.21 billion.

Net Income from continuing operations attributable to Xerox rose to $305 million, or 26 cents per share, from $297 million, or 23 cents per share.

Excluding items, the company earned 31 cents per share.

Analysts expected a profit of 29 cents on revenue of 5.07 billion.

Xerox shares have fallen about 28 percent in the last one year, through Thursday.

Reporting By Arathy S Nair in Bengaluru; Editing by Joyjeet Das

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