Xerox’s 1st-quarter results lift stock as revenue from services and supplies picks up

Xerox’s 1Q results lift stock as revenue climbs

NEW YORK — Xerox Corp. posted its first quarter of revenue growth in more than a year on Friday, boosted by its foray into the services business and an upswing in corporate spending on printer and copier supplies.

The company also offered a second-quarter earnings forecast that topped Wall Street expectations.

Its stock rose 87 cents, or 8.3 percent, Friday to close at $11.32 after hitting a new 52-week high of $11.72 earlier in the day.

The results came about 10 weeks after Xerox closed its $6.4 billion acquisition of business outsourcer Affiliated Computer Services Inc. and offered more evidence that companies are loosening their purse strings as the recession eases.

Xerox posted a loss of $42 million, or 4 cents per share, for the first three months of the year, compared with a profit of $42 million, or 5 cents per share, a year earlier. Earnings were dragged down in the most recent quarter by one-time expenses related to layoffs and its acquisition of ACS.

Excluding one-time costs, however, Xerox said it earned 18 cents per share, beating the average forecast from analysts of 13 cents per share, according to Thomson Reuters.

Revenue jumped 33 percent to $4.7 billion, primarily because of the ACS acquisition. Assuming that the deal had gone through a year ago, revenue would be up 5 percent, Xerox said. Analysts expected $4.65 billion.

The increase in revenue came mainly from the addition of ACS’s business outsourcing segment, which takes on functions for other companies such as payroll or run health care filings.

Xerox was already doing some outsourcing, handling the flow of documents and printer systems for other companies. But the acquisition helped Xerox more than double its first-quarter services revenue. Assuming the deal had already gone through last year, services revenue was up 3 percent to $1.8 billion.

Sales of copier and printer supplies also picked up as corporate spending rebounded from the depths of the recession last year, climbing 15 percent.

The company’s forecast for the quarter ending in June beat estimates. It expects earnings excluding one-time items of 20 cents to 22 cents per share. Analysts were looking for 18 cents, on average.

Xerox also said it expects full-year earnings at the top end of its previous forecast, which called for 75 cents to 85 cents per share, excluding items. The average forecast is for 81 cents.