Xerox Q1 Profit and Sales Rise, Beat; Q2 Guidance In-line

Xerox reported Q1 net income grew 16.5% to $233 million, or $0.24/share (including a $0.02 restructuring charge), beating analysts' average EPS estimates of $0.20 (Thomson) to $0.21 (Bloomberg). Revenues rose 3.8% to $3.84b, ahead of analysts' expectations of $3.81 (Bloomberg) to $3.82b (Thomson). Xerox projects Q2 EPS of $0.26 - $0.27, compared to analysts' average estimate of $0.27. The chief investment officer at Fischer Investment Group commented: "They continue to be strong and stable. They need to keep improving, and they've addressed their issue somewhat through the acquisition of Global Imaging [announced earlier this month for $1.5B]." CEO Anne M. Mulcahy believes that "along with progress on the top line, excellent operational performance and improved margins [gross at 40.6%, +0.5% y-o-y] led to a 17% increase in net income and earnings that exceeded our expectations." Ordinary shares of Xerox lost 0.33% to $18.08 during normal trading yesterday. There was no pre-market activity at the time of publishing.

Sources: Press release [pdf], Bloomberg, MarketWatch
Commentary: Xerox to Acquire Global Imaging Systems for $1.5B • Earnings Outlook for Week of April 16 • Xerox Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: Xerox (XRX). Competitors: IKON Office Solutions (IKN). ETFs: PowerShares Dyn Hardware&Con Electronics (PHW)
Related: Xerox Q1 earnings related documents

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