Earnings for the April-June period were down due to restructuring charges amounting to $AU65.8 during the second quarter as the group tried to improve its gross margin.
This involved a cut in selling, administrative and general expense, which resulted in a 1,000 staff being cut, mainly in North America.
Xerox chairwoman and chief executive Anne Mulcahy said: “Our annuity-based global business led to steady revenue growth this quarter along with earnings and cash in line with our expectations.”
Total revenue of $AU4.7bn grew 8 per cent during the quarter but revenue on equipment sales only increased 2 per cent to $AU1.21bn from $A$1.19bn in 2007.
The figures equate to second-quarter earnings of AU25c per share, including the company’s previously announced restructuring charge of 5c on each share.
Xerox claimed the results fall in line with its full-year earnings expectations of between $AU1.32 and $AU1.36 on each share.
Post-sale revenue, which represents more than 70% of the company’s total revenue and encompasses products such as ink, increased 10 per cent to $3.52bn in the period from April to June.
The company has also reaped the benefit of its £757m acquisition of Global Imaging Systems, which was completed in May 2007.
During the second quarter, Xerox generated $AU461m in operating cash flow while also repurchasing $AU394m in Xerox shares ahead of an additional $AU1.05bn share repurchase, which was authorised at the end of last week.
Mulcahy added that the company is “seeing consistent positive performance in the small and mid-size business market, with strong results from our developing markets and Global Imaging operations”.
Xerox expects its third-quarter earnings to be in the range of AU29c to AU31c per share, which will help maintain its full-year earnings expectations of $AU1.31 to $AU1.36 per share.
Xerox second quarter results in brief
Profit down 19 per cent to $AU225m from $AU278m in 2007
Total revenue up 8 per cent to $AU4,736m
Equipment sales grow 2 per cent
Operating cash flow at $AU462m
Full-year expectations of $AU1.32-$1.36 per share
Read the original article at www.printweek.com.
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