Xerox sees turnaround continuing into 2005, 2006

Monday, November 22nd 2004, 10:04 am
By: News On 6

NEW YORK (Dow Jones/AP) _ Xerox Corp. on Monday predicted its business will continue to turn around and sees earnings and revenue growing in 2005 and 2006.

The Stamford, Conn., office-equipment giant expects that revenue growth will speed up in 2006, as improvement in its premium color business maintains its pace.

For this year's fourth quarter, Xerox repeated its earnings projection of 20 cents to 22 cents a share.

Analysts surveyed by Thomson First Call project, on average, earnings of 22 cents a share.

Xerox said its strategy to boost revenue in the future centers on supplying businesses with affordable color printing and converting more printing to a digital process.

Each color page printed yields more than five times the revenue of a black-and-white page, Xerox said.

Troubled by technology jumps that hampered copier sales as well as by accounting investigations, Xerox foundered in the late 1990s. In October, the company reported that the government had closed the books on an accounting investigation and said sales of new products were surging.

For 2005, Xerox projected a 3 percent advance in revenue, as revenue from color printing continues to grow at a 20 percent annual rate. In 2003, Xerox generated $15.7 billion in revenue.

The company projected 2005 earnings of 90 cents to $1 a share, up from profit of 83 cents to 85 cents a share this year.

Analysts have been looking for 2005 earnings of about 93 cents a share. Cost cuts, which helped earnings despite revenue declines in the third quarter, will continue to benefit the company.

In 2006, Xerox expects earnings to grow 15 percent to 20 percent, on 5 percent revenue growth.