Xerox Corp.’s (NYSE:XRX) efforts to develop its services business took a toll on its first-quarter results, as expenses on new offerings cut into profits.
According to its CEO Ursulla Burns, though the company’s investments in new products and long-term contracts have adversely affected profits in the short term, she expects the company to offset them with cost controls.
Earnings were $269 million (19 cents per share) compared to $281 million (19 cents a share) in the year ago period. After adjustments, earnings were 23 cents a share, in line with what analysts expected.
Revenues grew 1 percent to $5.5 billion from $5.47 billion, just slightly higher than $5.47 billion expected by analysts. In line with company strategy, services revenue grew while technology sales declined.
Costs and expenses increased by 1 percent to $5.19 billion.
Xerox expects to earn 25 cents to 28 cents, excluding items, in the current quarter, and 21 cents to 24 cents on a net basis. This is in line with analysts’ projections of 26 cents a share.
For the full year 2012, the company estimates that it will earn between 97 cents to $1.03 a share, and in the range $1.12 to $1.18 per share on an adjusted basis, much better than the Street expectations of $1.08 a share.