Xerox is reporting 4th quarter earnings that saw gains, while sales were down a bit.
Xerox is reporting net profits of $818 million, compared to $137 million last year at this time, with the results benefitting from the sale of the company’s stake in the Fuji Xerox joint venture.
Adjusted earnings per share were $1.33, beating Wall St. estimates.
Revenues of more than $2.4 billion were down slightly from a year ago, but still they came in better than Wall Street expected.
At Brighton Securities, Chairman George Conboy says overall, this was a pretty good quarterly report for Xerox, and he’s encouraged by the fact sales did not dip as much as expected.
“Although sales were down, they were down only a little bit, about two percent. That’s a slowdown of the declines from previous years. So if management can put the brakes on the sales decline and also work on profitability, that’s a one-two punch that can help Xerox and possibly raise the stock price,” Conboy said.
Xerox has been involved in an attempt to acquire HP through an unsolicited takeover offer. HP has balked at the price Xerox is offering.
Conboy does not see the takeover fight as a distraction for Xerox. He says the company has to pursue other opportunities outside of its core business if it is to grow and thrive.
In its earnings report on Tuesday, Xerox said that HP has rejected its proposal and "refused to engage in mutual due diligence or negotiations regarding the proposal." During a conference call with analysts, Xerox CEO and Vice Chairman John Visentin said that, "The value of this transcation goes beyond economics. The printing industry is decades overdue for consolidation and the first mover will have a significant advantage," Visentin said.
Vistentin also said that the meetings Xerox officials have had with HP shareholders "have been quite positive; and they understand the transaction, they believe in the combination," Visentin said on the call.
HP released this statement on Tuesday after the Xerox earnings report was released:
Xerox’s results do not alleviate the fundamental concerns about the continued revenue declines and health of the Xerox business. The fact remains: Xerox is relying on HP’s balance sheet to advance its proposal, which significantly undervalues HP and would require our shareholders to exchange the value of our businesses and the opportunities afforded by our balance sheet for stock in a company of questionable value and exposed to meaningful risk, due to inordinate leverage and sustained, declining performance.
