Xerox's earnings 'to grow 35% next year'
By Amy Yee in New York
Published: November 24 2003 21:29 | Last Updated: November 24 2003 21:29
Xerox, the office equipment manufacturer, on Monday said it expected earnings to grow 35 per cent next year as the company continues to push digital and colour technology while phasing out older analogue copier models.
The company said it expected full-year 2004 earnings per share of 67-72 cents, which represents the lower end of analysts' estimates. It expects earnings per share for 2005 to be 90 cents-$1.
At an investor meeting in New York on Monday, Anne Mulcahy, chief executive, said she was comfortable with estimates of fourth-quarter 2003 earnings per share of 13-16 cents.
Xerox plans to phase out older "light lens" copiers as it continues to develop more profitable digital products. Larry Zimmerman, chief financial officer, said revenue from analogue models would shrink about 35 per cent next year and 30 per cent in 2005. Xerox expects total revenue to be flat next year, and anticipates 5 per cent growth in 2005.
Xerox has been focusing on "multi-functional devices" - single units that act as printer, copier and scanner. Other com- panies are racing to keep up with the trend towards consolidation of office equipment.
Xerox faces increased competition as Hewlett-Packard, the computer printer giant, launches a line of high-end corporate copiers. In August HP signed an agreement to use copier engines manufactured by Konica, the Japanese group, to power the computer company's new high-end copier units, which can scan, copy and print documents.
Launching more competitive products has been part of Xerox's "move or lose" strategy to return to profitability. Three years ago the company was nearly bankrupt and had also been hit by claims of accounting fraud.
Xerox in September said third-quarter earnings rose 18 per cent, driven by increased sales of its colour systems and improved business in developing markets.
Xerox said 20 per cent more colour pages would be produced next year, excluding ink-jet. The company expects that by 2007 offices will print about 159bn colour pages, compared with 64bn last year.
Shares in Xerox edged up nearly 1 per cent to $10.63 at the close of trade.
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