Xerox fourth-quarter profit tops Street view, shares up

(Reuters) - Xerox Corp reported quarterly earnings slightly above expectations on Thursday and reiterated its full-year targets as it restructures parts of its business.

Fourth-quarter revenue was flat at $5.9 billion and earnings per share, excluding items, were 30 cents. Analysts looked for $5.88 billion in revenue and EPS of 29 cent.

Xerox stock gained 2.2 percent to $7.75 in early trading.

For the first three month of 2013, Xerox expects earnings to be in a range of 23 cents to 25 cents per share. Analysts looked for 24 cents in the first quarter, according to Thomson Reuters I/B/E/S.

The company reiterated its full-year EPS target of $1.09 to $1.15 and forecast operating cash flow of $2.1 billion to $2.4 billion.

Some analysts called the outlook conservative.

Shannon Cross at Cross Research said the guidance "is likely conservative, given tailwinds from currency, significant product refreshes in technology, restructuring and easier comparisons."

She added that she anticipated the company would return cash to shareholders through a dividend, share repurchase and service-oriented acquisitions.

The Norwalk, Connecticut-based company said in November it was taking a $100 million restructuring charge as a result of a tougher economy and tighter corporate budgets.

Most of the restructuring focus is on the services segment, which handles anything from helping to manage toll systems to healthcare programs.

Xerox, which has its roots in the copier and printer business, said quarterly revenue from its services business was up 7 percent thanks to recurring contracts.

It now generates more than half of its revenue from its services businesses after its acquisition of Affiliated Computer Services Inc for $5.5 billion in 2009.

But new contract signings in the services segment declined 25 percent to $2.9 billion in last 12 months. Xerox said the drop was due to a decrease in very large deals and shorter contract lengths.

Still, it said the pipeline of future deals was strong with 6 percent year-on-year growth.

Revenue from the document technology business, which includes document systems, supplies, technical services and financing of products, was down 8 percent due to difficult economic and market conditions, Xerox said.

The company said it expected to feel the impact of a continued weak economic environment this year as well, but was optimistic that equipment sales would improve due to a refreshed line of products.

(Reporting by Nicola Leske; Editing by Jeffrey Benkoe)

Source: http://news.yahoo.com/xerox-fourth-quarter-revenue-line-street-estimate-133926263--sector.html

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