Xerox beats on profits, falls short on revenues

Xerox beat Wall Street estimates for profits on Tuesday as cost-cutting exercises implemented by activist investors Carl Icahn and Darwin Deason in their first quarter in control of the photocopier were successful.

However, the Connecticut-based outfit fell short on revenues as a long-running decline in its core business led to a net profit of half what it was a year earlier and a 5.8% year-on-year fall in revenues to $2.35bn, below average analyst estimates of $2.42bn.

Operating cash flow for the quarter rose, leading Xerox to up its full-year free cash flow estimates to somewhere between $900m to $1bn.

Xerox's net income fell 50% to $89 million, or $0.34 per share, for the three months ended 30 September, while, excluding items, the company turned in earnings of $0.85, topping estimates of $0.78 on the Street.

Xerox has been locked up in a tense standoff with Fujifilm Holdings over an aborted $6.1bn merger with its 56-year-old joint venture with Fujifilm, Fuji Xerox.

Fujifilm, which was set to take a majority stake in the combined company, sued Xerox after it backed out of the deal and, just last week, it won an appeal that will give the Japanese company the leverage it needs to bring Xerox management back to the negotiating table.

At the close, Xerox shares had lifted 0.95% to $26.65 each.