Xerox Earnings Hit Mark

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Xerox

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said fourth-quarter earnings rose 18% from a year ago as cost controls helped offset slightly lower revenue.

The company earned $282 million, or 27 cents a share, in the quarter, compared with $240 million, or 24 cents a share, last year. Adjusted for a restructuring charge, Xerox earned 32 cents a share in the quarter, matching the Thomson First Call consensus.

Sales fell 2% from year ago to $4.25 billion, shy of the $4.42 billion Thomson First Call consensus. Xerox said sales were flat at $2.16 billion, while service, outsourcing and rental income fell 2% to $1.88 billion and finance income slid 9% to $211 million.

"During the quarter, equipment sales were impacted by a more significant shift in product mix with stronger sales of lower-priced systems. At the same time, demand and install activity accelerated for key products like entry-level color production systems and office desktop multifunction devices," the company said. "This increased activity fuels future post-sale revenue -- the engine of growth for Xerox's annuity-based business. We're confident that the short-term impact on equipment sale revenue will deliver long-term gains in top-line growth."

For the first quarter, Xerox expects to earn 20 cents to 23 cents a share. The consensus estimate is 22 cents a share. For 2006, the company sees $1 to $1.07 a share. The consensus estimate is $1.04 a share.

The stock added 4 cents to $14.50 early Wednesday.