NORWALK, Conn. – Xerox Corp.'s fourth-quarter earnings plunged as the printer and copier maker booked hefty charges for layoffs and other restructuring costs, and the company on Friday forecast first-quarter profit below Wall Street expectations.
The Norwalk, Conn.-based company said earnings slid to $1 million, or break-even per share, for the three months ended Dec. 31, from year-ago profit of $382 million, or 41 cents per share.
Excluding a charge of 27 cents per share related to staff cuts and other one-time items, earnings totaled $265 million, or 30 cents per share, in the latest period. Analysts, who typically exclude one-time charges from their estimates, expected higher profit of 34 cents per share, according to a survey by Thomson Reuters.
Xerox, which has seen slower equipment orders from big U.S. customers during the recession, announced last year that it would cut 3,000 jobs, a move the company said will save $200 million annually.
Sales fell 10 percent to $4.37 billion from $4.88 billion a year ago, missing Wall Street's average estimate of $4.7 billion. The decline was led by equipment sales, which dropped 15 percent. "Post-sale" revenue — sales of ink and other supplies — fell 8 percent, the company said, as distributors trimmed inventory.
Revenue in developing markets, which had jumped 17 percent through the third quarter of 2008, fell 14 percent in the fourth quarter as the dollar strengthened against most currencies and Russian and eastern European economies rapidly declined.
"In the fourth quarter, the continued weakening economy and rapid shift in exchange rates put pressure on the business," Xerox Chief Executive Anne Mulcahy said in a statement.
The company also gave a cautious earnings projection for the current period, forecasting fiscal first-quarter earnings of 16 cents to 20 cents per share — below analysts' average estimate of 24 cents per share.
For the full fiscal year, Xerox earned $230 million, or 26 cents per share, on revenue of $17.61 billion, compared with 2007 profit of $1.14 billion, or $1.19 per share, on sales of $17.23 billion.
Excluding charges, adjusted profit totaled $985 million in 2008.
The company closed the year with $1.2 billion in cash and cash equivalents.