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 STAMFORD, Conn., Oct. 28 /PRNewswire/ -- Third quarter net income of Xerox Corporation (NYSE: XRX) was $150 million, or $1.28 a primary share, compared with $121 million, or $1.07 a primary share, in the corresponding 1992 period, the company reported today.
 Net income in the nine months ended Sept. 30 was $451 million, or $4.01 a primary share, compared with a loss of $284 million, or $3.49 a primary share, in the first nine months of last year. The year- ago loss reflects the cumulative effect of changes in accounting related to retiree benefits and income taxes.
 Income from the Xerox document processing business in the third quarter was $148 million compared with $119 million a year ago, and in the first nine months income was $384 million against $346 million.
 Document processing contributed $1.26 to earnings per primary share in the third quarter compared with $1.05 a year earlier, and $3.33 in the first nine months of 1993, compared with $3.08 in the corresponding 1992 period.
 Growth in document processing income benefited from a one-time U.S. tax credit of $23 million, or 22 cents a share in the third quarter. Excluding this one-time gain, document processing income in the quarter increased 6 percent and earnings per share were $1.04 against $1.05 last year. The nine-month period included a first quarter Brazilian tax credit of $17 million, or 17 cents a share.
 Document Processing Results
 In the third quarter, document processing revenues were $3.589 billion against $3.598 billion a year earlier. In the nine-month period, revenues were $10.424 billion against $10.456 billion a year earlier.
 Excluding currency, document processing revenues grew 4 percent in the third quarter and 3 percent in the first nine months of the year.
 "Equipment sales in the third quarter increased after two quarters of decline," said Paul A. Allaire, Xerox chairman and chief executive officer. "The increased sales in part reflected benefits from the realignment of the U.S. sales force earlier this year and recent black-and-white copier introductions."
 This year Xerox has introduced eight new copiers, reflecting the company's ongoing commitment to respond to customer requirements with the broadest, most competitive product line in the industry, Allaire said.
 Revenues before currency from black-and-white copiers, which represent approximately two-thirds of the document processing revenue, increased 2 percent in the third quarter, compared with a 1 percent decline in the first half.
 Third quarter revenues from the company's digital products were 21 percent higher pre-currency than in the comparable 1992 period and accounted for 20 percent of total document processing revenues.
 Allaire said that revenues from the Xerox DocuTech line of production publishers and the company's color products maintained excellent growth.
 "Total worldwide employment declined by 600 in the third quarter, bringing the employment reduction to 1,800 since Jan. 1," Allaire said. "The employment reductions, in combination with rigorous expense control, resulted in a third quarter decline of 1.8 percentage points in the ratio of selling, general and administrative expenses to revenue compared with the third quarter of 1992. This was partially offset by continued pressure on sales gross margins from competitive pricing, adverse currency and product mix."
 Brazil continued to experience a high level of inflation and devaluation, which resulted in about $50 million more in foreign exchange losses from balance sheet translation in the third quarter versus a year ago and about $70 million year to date. After the impact of these foreign exchange losses, total document processing pre-tax income was down 2 percent in the quarter, Allaire noted.
 Chairman's Outlook
 "The external environment continues to present considerable challenge," Allaire said. "For the balance of the year, the European and Brazilian economic environments will remain difficult, and competitive pricing and currency will continue to put pressure on earnings. However, we are continuing to strive for full year document processing income growth.
 "Our new black-and-white copiers and powerful digital products are being well received by our customers. Increased benefits from our U.S. sales force realignment and further productivity gains are also important in achieving our full year profit objective," the Xerox chairman said.
 Financial Services Disengagement On Track
 Allaire said that the company's plans to disengage from its financial services business, as announced at the beginning of 1993, remain on track.
 In connection with that strategy, Allaire noted that in September, Talegen Holdings, Inc. (formerly Crum and Forster) received regulatory approval and completed recapitalization and restructuring of the firm's insurance operations into seven stand-alone operating groups. In addition, on Oct. 25 the company announced completion of the sale of Furman Selz Holding Corporation, an investment banking firm.
 Third quarter income from insurance and other financial services (IOFS) was $2 million, equal to the 1992 third quarter. Growth in operating profit at Talegen reflected improvements in both productivity and loss experience. Third quarter IOFS results also included a one-time $18 million tax credit, which was offset by charges related to the restructuring and ultimate disposition of these businesses and the absence of capital gains at Xerox Life.
 In the first nine months, income from insurance and other financial services totaled $67 million, including a $62 million gain from the first quarter sale of The Van Kampen Merritt Companies, Inc., an asset management firm, against $12 million a year ago.
 /NOTE TO EDITORS: Total common shares used to calculate primary earnings per share were 106.1 million in the third quarter and 101.1 million in the first nine months of 1993 compared with 97.0 million in both of the corresponding 1992 periods/
 Financial Summary
 (In millions, except per-share data)
 Third Quarter Pct.
 1993 1992 Growth
 Document Processing $3,589 $3,598 --
 Net Income
 Document Processing 148 119 25
 Insurance and Other
 Financial Services 2 2 --
 Net Income $150 $121 25
 Primary Earnings per Share
 - Document Processing $1.26 $1.05 20
 - Net Income $1.28 $1.07 20
 Fully Diluted Earnings per Share
 - Document Processing $1.21 $1.03 17
 - Net Income $1.23 $1.04 18
 Nine Months Pct.
 1993 1992 Growth
 Document Processing $10,424 $10,456 --
 Net income (loss)
 Document processing 384 346 11
 Insurance and Other
 Financial Services 67 12 (A)
 Income from Cont. Operations 451 358 26
 Discontinued Operations -- 122 (A)
 Cum. Effect of Change in
 Accounting Principles -- (764) (A)
 Net Income (Loss) 451 (284) (A)
 Primary Earnings (Loss) per Share
 -- Document Processing $3.33 $3.08 8
 -- Net Income 4.01 (3.49) (A)
 Fully Diluted Earnings (Loss) per Share
 -- Document Processing $3.23 $3.01 7
 -- Net Income 3.84 (2.81) (A)
 (A) Calculation not meaningful.
 -0- 10/28/93
 /CONTACT: Judd Everhart, 203-968-3572, or Thomas C. Abbott, 203-968-3378, both of Xerox/

CO: Xerox Corporation ST: Connecticut IN: CPR TLS SU: ERN

SM-JS -- NY007 -- 7674 10/28/93 07:41 EDT
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Publication:PR Newswire
Date:Oct 28, 1993

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