Despite missing expectations, Xerox (XRX) swung higher Thursday after announcing it more than doubled its third-quarter profit on new contracts and equipment sales, and plans to slash 2,500 jobs by the end of next year.
The Norwalk, Conn-based company posted net income of $250 million, or 18 cents a share, compared with $123 million, or 14 cents a share, in the same quarter last year.
Excluding special items, earnings were 17 cents a share, just missing average analyst estimates polled by Thomson Reuters of 21 cents.
Revenue for the document-management company was $5.42 billion, up 48% from $3.67 billion a year ago, though still falling narrowly short of the Street’s $5.44 billion view.
“Building on our solid first-half results, we delivered steady revenue and earnings growth in the third quarter, keeping us on track to close the year strong,” Xerox CEO Ursula Burns said in a statement.
Higher servicing contracts, up 26% last quarter, helped drive earnings along with improved equipment sales, particularly of document systems, supplies, technical service and financing products.
Fiscal 2010 restructuring costs related to acquisitions are expected to be $120 million more than previously disclosed, the company said.
In its largest acquisition to date, Xerox acquired in February business-process outsourcer ACS for $6.4 billion.
Next year, in a continuation of its restructuring effort, the company plans to cut 2,500 jobs, or 2% of its workforce, totaling $500 million in charges. The move is in addition to another 2,500 announced in January.
Given increased profitability in recent quarters, Xerox raised its full-year earnings outlook in the range of 92 cents to 93 cents a share, up from its earlier view of 88 cents to 92 cents a share.
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