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Xerox 3rd-quarter profit grows 28 pct; shares rise

October 25, 2011

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NORWALK, Conn.—Printer and copier maker Xerox Corp. posted a 28 percent jump in its third-quarter net income Tuesday, helped by higher revenue from services like document outsourcing.

The company bought outsourcer Affiliated Computer Services for $6 billion last year so it could expand lucrative service offerings. Its traditional printer and copier business had suffered during the recession as companies cut back on spending.

Xerox shares rose 29 cents, or 3.6 percent, to $8.29 in premarket trading.

The company said it earned $320 million, or 22 cents per share, in the July-September period. That's up from net income of $250 million, or 17 cents per share, in the same period a year earlier.

Excluding special items, Xerox earned 26 cents per share.

Revenue grew 3 percent to $5.58 billion from $5.43 billion. Xerox said its technology revenue from the sales of supplies, printers, copiers, scanners, and the technical service and financing of products, grew 1 percent. Revenue from its services division rose 6 percent.

Analysts, on average, were expecting earnings of 25 cents per share on revenue of $5.61 billion, according to a poll by FactSet.

Xerox CEO Ursula Burns also said supply constraints stemming from the March earthquake and tsunami in Japan have eased.

The Norwalk, Conn., company forecast fourth-quarter earnings of 28 cents to 31 cents per share and adjusted earnings of 32 cents to 35 cents per share. Analysts, who exclude one-time items, had expected earnings of 32 cents per share in the fourth quarter.

For the year, Xerox narrowed its full-year guidance. It now expects earnings per share of 92 cents to 95 cents, compared with a July forecast of 91 cents to 96 cents per share. It said Tuesday that it expects adjusted earnings per share of $1.08 to $1.11, compared with a wider previous forecast of $1.07 to $1.12 per share.

Analysts expect earnings of $1.08 per share for 2011.