Xerox Suffers Another Setback as Credit Line Is Drawn Down

Xerox (XRX), the troubled copier maker, warned Thursday of weaker-than-expected fourth-quarter results and said it had drawn down all of an emergency credit line it was tapping for daily operations.

Xerox said fourth-quarter results will likely soften from third-quarter levels, when the company lost 20 cents a share. The First Call/Thomson Financial consensus estimate calls for a 7-cent fourth-quarter loss.

The weak operating results and the state of the credit line will once again have traders wondering about the document company's ability to pay down its burgeoning debt burden. Xerox shares have plummeted this year as investors have worried that it will run out of cash as a huge raft of loan commitments come due.

Xerox also said that it has drawn down on the balance of its $7 billion revolving credit agreement. There had been $1.7 billion left in the facility as of Oct. 31. The company said that it has a current cash balance of $1.4 billion. It is unclear whether that will be enough to finance operations in the coming year. Yesterday, TheStreet.com reported on the company's need to refinance its debt.

The company also said it had completed the sale of its China operations to Fuji Xerox for $550 million.

>To order reprints of this article, click here: Reprints