Xerox Corp. reports Q3 revenue of $3.8 billion

Xerox Corp. Wednesday announced revenue of US$3.8 billion for its third fiscal quarter, which ended Sept. 30, off 6 percent from a year earlier.

The Stamford, Conn.-based maker of copiers and printers said it had net income of $105 million for the quarter, compared with a $32 million loss in the same period in 2001.

Earnings per share were 5 cents for the quarter, including restructuring charges of 6 cents per share. The company lost 5 cents per share during the third quarter of last year.

"Margins are up, costs are down, and Xerox's streamlined business model is delivering sustainable profitability as well as strong operational cash generation," Anne M. Mulcahy, Xerox's chairman and CEO, said in a statement.

Changes in operations led to gross margins of 42 percent, a year-over-year increase of 4.4 percent. The company also cut costs by $152 million, or 13 percent compared with the third quarter of 2001.

Xerox said that about half of its reduced third-quarter revenue is due to the company's exit last year from the retail small office/home office equipment business, as well as declines in its developing markets operations.

Mulcahy's outlook for the fourth quarter was upbeat.

"While we expect that economic uncertainty will continue to impact year-over-year revenue results, total revenue in the fourth quarter will continue to trend positively, largely driven by significant equipment sales improvement due to new product launches," she said. "Enhanced business model improvements will strengthen our bottom line, delivering strong full-year profitability."

During the previous quarter, which ended June 30, Xerox reported revenue of $4 billion, a decline of 8 percent from the same period in 2001. Earnings per share for the second quarter were 12 cents, including restructuring charges of 4 cents per share.

Xerox last month acknowledged that it's the target of an investigation by the U.S. attorney's office in Connecticut into its past accounting practices. The probe follows an earlier government review of the company's financial reporting that led to a settlement in April when Xerox paid a civil penalty of $10 million and restated some of its financial results dating back to 1997.

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