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Fourth quarter losses narrow at Xerox 
Monday, January 28 2002
by Matthew Clark


After a year of job cuts and restructuring, Xerox announced that it had returned
to operational profitability, but still recorded a net loss of USD4 million. 









Xerox reported Q4 earnings of USD0.15 per share, excluding restructuring charges
and the effects of unhedged currency. Net loss however, including restructuring
charges of USD0.19 as well as a USD0.06 gain from foreign currency and a USD0.03
loss from the Argentina devaluation, Xerox reported a fourth-quarter net loss of
USD0.01 per share. 



The company's figures came in line with the consensus estimate of analysts
surveyed by Thomson Financial/First Call which predicted a loss of USD0.01 per
share, although forecasts ranged from loss of USD0.06 to a profit of USD0.06. 



While the company is still loss making on a net basis, it has improved its
balance sheet dramatically from last year. Xerox reported USD4 million in losses
for the most recent quarter, compared to USD20 million in losses for Q4 2000. The
company also said selling, administrative and general expenses were down 25
percent and improved 4.5 percentage points to 27.7 percent of revenue. Continuing
progress in inventory reductions resulted in a USD600 million or 30-percent
decrease for the year, including a USD200 million reduction from third-quarter
2001.



For the year however, Xerox saw net loss increase. In 2001 net loss for the
company was USD0.43 per share or USD293 million, compared to USD257 million in
2000. Revenues in 2001 were USD16.5 billion, compared with USD18.7 billion in
2000.



"Today's results are all about execution -- the precise execution of a
turnaround strategy that has significantly strengthened Xerox's core operations
while effectively positioning the company to exploit future market opportunities
in its production, office and services businesses," said Anne M. Mulcahy, Xerox
chairman and chief executive officer, in a statement. 



Mulcahy said the difficult decisions made over the past year, including the
closure of its small office home office operations which led to the loss of 450
jobs in Dundalk, have made Xerox "leaner, faster, and more flexible." She went
on to say that all of the company's cost cutting measures have led to "a return
to operational profitability, representative of the new Xerox that is emerging
from our successful turnaround."

 

Xerox's revenue was for Q4 was USD4.3 billion, 13 percent lower than in the same
period in 2000 but beat analyst forecasts of USD4.19 billion. "Weakened
economic conditions continue to impact revenue, especially in high-end and colour
products," Mulcahy admitted. 



For the first quarter however, the printer and copier company said it was
comfortable with the range of analysts' expectations of earnings per share
between flat and a loss of USD0.03. 



In Ireland Xerox still employs 600 staff in its Dundalk office and an additional
1,500 customer service staff in Dublin. Worldwide, the company employs over
80,000, although figures released by the firm on Monday show that Xerox cut
around 13,500 jobs in 2001. 



Xerox is on line at http://www.xerox.com