Xerox Cuts Profit in Half, Ups Forecast

NORWALK, Conn. (TheStreet) -- Xerox(XRX Quote) more than halved its third-quarter profit, burdened by the effect of companies continuing to cut back on copier and printer supplies.

Shares, however, are jumping 3.2% to $7.97 in afternoon trading after the company raised its full-year forecast.

During the quarter, the company earned $123 million, or 14 cents a share, compared with $258 million, or 29 cents, in the year-ago period. Analysts expected the company to earn 12 cents a share.

The company managed to beat expectations through cost controls, but said it has not seen a shift towards increased spending in technology.

Sales, as a result, sank 16% to $3.68 billion from $4.37 billion last year.

Last month, Xerox agreed to purchase Affiliated Computer Services, a company that handles critical back-office functions for other businesses.

Excluding costs related to this acquisition, the company expects to earn between 55 cents and 57 cents for the year, up from a prior forecast of 50 cents to 55 cents.

-- Reported by Jeanine Poggi in New York

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