Xerox's chief executive pinned the company's hopes for future growth on new products, more aggressive sales and marketing and continued restructuring, after its third-quarter results beat market expectations.
Ms Anne Mulcahy told analysts that the office copier group was "not counting on the economy to improve at all" but said the "strength of the portfolio, the pricing position and the position of the company in total" meant Xerox was much stronger entering 2003.
The US company, which employs 2,000 people in Ireland, has been shaken by accounting scandal this year. In April, the group settled a case brought by the Securities and Exchange Commission. It paid a $10 million (€10.24 million) civil penalty, without admitting or denying the allegations, and restated pre-tax income and revenues for 1997-2001.
The shadow of continuing investigations into former senior executives still hangs over the firm but investors have begun to focus on any sign of recovery in the core business. Ms Mulcahy said yesterday there was strong demand for new products in core markets such as colour copiers for the office and production colour printing machines. That demand should feed through in sales in the fourth quarter, she said.
By noon yesterday, the shares were trading at $6.46, down more than 3.5 per cent on the day but 53 per cent above the 52-week low struck on October 10th.
Xerox reported earnings of five US cents per share, including restructuring charges of six cents. That compared with a five-cent loss per share in the same period of 2001. Analysts had expected earnings of two cents.
Revenue for the three months to September 30th was $3.8 billion, down $259 million, or 6.4 per cent on the equivalent period. Half the decline was accounted for by a drop in developing market sales and the company's decision to quit its retail small office/home office equipment business. Mr Lawrence Zimmerman, chief financial officer, said the company would "intensify its restructuring" .
Xerox said it would take a non-cash charge to shareholders' equity in the fourth quarter to account for the decline in value in its pension plan.
- (Financial Times Service)
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