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This is the fifth successive quarterly results presentation in which Xerox reported a loss. The net loss in the third quarter was USD211 million, or USD0.29 per share, compared to a loss of USD191 million, or USD0.30 per share, a year ago. These figures were in line with expectations. The total revenue for the third quarter amounted to USD3.9 billion, which means a USD0.6 billion decrease since last year.
Following the news of the results Standard & Poor's downgraded Xerox to "BB", or junk status. S & P had rated Xerox at "BBB-minus" prior to Tuesday.
While the results met with expectations, the terrorist attacks in the US had a significant impact on the company's operations, according to Anne Mulcahy, Xerox's chief executive. "Xerox was prepared for significant challenges in the third quarter due to weakened economies," she said. "Despite expected revenue declines, our results in July and August exceeded expectations, evidence of our much improved operations. However, the dramatic economic downturn since the events of September 11 resulted in an unprecedented loss in September, driven by disproportionate revenue decreases during the last two weeks of the month."
Xerox has been in trouble for more than a year as sales have fallen sharply while competition has increased. A year ago the company launched a turn-around plan, which aimed to cut costs by around USD1 billion. On Tuesday the company announced that that target has been reached, partly because 11,000 jobs have been cut in the year.
Around 450 jobs were cut in Ireland in June as part of that restructuring plan when the firm ceased its SOHO (small office home office) operations in Dundalk.
"While our progress to date has been significant, we will intensify our cost-reduction activities to help lessen the impact from heightened economic concerns," Mulcahy added.
The chief executive also stated that she expects "modest improvements in the short term and more dramatic improvements in the long term." She said that she expects that the turn around programme will make Xerox profitable again. "However, the uncertainty in the marketplace presents challenges and will lessen the sequential increase in fourth quarter revenue."
Analysts have said they expect Xerox to become profitable in the fourth quarter of 2001.
In Ireland Xerox employs 600 staff in its Dundalk office and an additional 1,500 customer service staff in Dublin.
Xerox was trading up slightly in New York at 12:30 pm on Tuesday at USD7.35.
Xerox makes copiers and printers and employs 80,000 people worldwide. It has headquarters in Stamford, Connecticut.
More info: http://www.xerox.com
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