Xerox Revenue Slips on Service Downtick - TheStreet

Xerox Revenue Slips on Service Downtick

Earnings are flat due to a charge. Excluding the item, earnings beat estimates.
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Revenue slipped and earnings were flat in

Xerox's

(XRX) - Get Report

second quarter compared with a year ago, as the Stamford, Conn.-based copier maker saw a year-over-year downtick in service revenue.

Xerox earned $86 million, or 9 cents a share, on revenue of $3.92 billion in the latest quarter, compared with earnings of $87 million, or 11 cents a share, on revenue of $3.95 billion last year. Service, outsourcing and rental revenue was $1.97 billion in the latest quarter, compared with $2.04 billion last year.

Lower overall sales reflected declining service revenue from the company's older light-lens technology and "moderating declines in its developing markets business." Equipment sales grew 8% in the second quarter, thanks largely to a 7-percentage-point currency benefit.

The latest quarter included a charge of 5 cents a share related to a terminated credit facility. Excluding the charge, Xerox beat the Thomson First Call earnings estimate by 2 cents a share.

Xerox, which flirted with bankruptcy two years ago, said second-quarter cash flow was $682 million, and it ended the quarter with a worldwide cash position of $2.3 billion. Debt decreased $2.5 billion in the quarter due to a June recapitalization in which the company exchanged $3.6 billion of existing debt for $1.34 billion of new equity, $1.25 billion of senior unsecured notes, and a new $1 billion credit facility.

Xerox shares closed Friday at $10.73, up 10 cents, or 1%.