Xerox Q3 Net Down, But Beats By a Penny

Xerox reported a 53% drop in third-quarter net income to $254 million, or $0.27/share, due to a net $0.31/share one-off gain last year, but was still able to beat analyst estimates by a penny. Revenues rose 12% to $4.3B, topping expectations of $4.24B. Xerox said it expects Q4 EPS of $0.39 to $0.41 and full-year EPS of $1.18 to $1.20. Analysts on average had forecasted $0.41 and $1.18/share, respectively. Equipment sales increased 14% to $1.16B, while Post-sale revenues rose 12% to $2.94B. Financial income fell 2% to $204M. Revenue from color printing grew 13%, representing more than half of equipment revenue and 39% of total revenue. Q3 gross margins were 40.1%, compared to 40.3% in Q2 and 40.2% last Q3. "This quarter’s solid results are proof positive that our business model is on track, generating double-digit profit growth and fueling a strong annuity pipeline that serves us well for the long term," commented CEO Anne Mulcahy in a statement. Xerox's earnings conference call is at 10:00 A.M. (check later for Xerox's earnings call transcript). Shares of Xerox gained 0.8% to $17.21 on Thursday.

Sources: Press release, Bloomberg, MarketWatch
Commentary: Xerox's Q2 Was Truly Mediocre • Xerox Takes On HP With New Color Printer • Would You Buy Xerox's New 'Green' Paper?
Stocks to watch: XRX. Competitors: CAJ, HPQ. ETFs: PTF, PHW
Related: Xerox Investor Relations Q3 Materials

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