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Xerox Corp hits profit forecast

XEROX Corp posted a profit in the first quarter that met its revised guidance, which the company slashed last month due to restructuring costs and declining technology spending.

Xerox also predicted its profit in the second quarter would be short of Wall Street estimates.

The printer and copier maker said yesterday that for the first quarter it earned US$42 million, or 5 US cents per share. This compares with a loss of US$244 million, or 27 US cents per share, a year ago. In that quarter, a hefty litigation charge led to the large loss.

The profit is a penny higher than expected by analysts polled by Thomson Reuters.

Revenue fell 18 percent to US$3.55 billion from US$4.34 billion. Analysts expected US$3.54 billion on average.

Xerox said the economy has resulted in businesses delaying their purchasing decisions, and its distributors are keeping lower levels of inventory.

The company reported equipment sales fell 30 percent to US$770 million. So-called "post-sale revenue," which includes the sale of ink and other supplies to companies that already own or lease Xerox machines, fell 14 percent to US$2.78 billion.

Xerox Chief Executive Anne Mulcahy said the rate at which enterprise technology spending fell sped up during the quarter.

Mulcahy said the company is concentrating on managing costs, generating cash and shoring up its market position with innovation and services.

"We're making progress in all three of these areas and expect the flow-through from our actions to mitigate further economic challenges," she said.


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