NEW YORK (Reuters) - Xerox Corp said on Friday it barely eked out a profit in the fourth quarter due to weak sales and $349 million in restructuring costs, and it forecast first-quarter results below analysts' targets.
The leading provider of digital printers and document management services, whose growth is driven by sales of services and supplies for printing machines, said fourth-quarter net income was $1 million, or nil per share, down from $382 million, or 41 cents a share, a year earlier.
Excluding special items, including litigation charges, profit was 32 cents a share, a penny below the average Wall Street forecast, according to Reuters Estimates.
Late last year XEROX (XRX.NY)announced a restructuring plan that included about 3,000 job cuts, aimed at saving $200 million in 2009. In the fourth quarter, restructuring charges were 27 cents a share.
Revenue fell 10 percent to $4.37 billion. Revenue from sales of supplies and services -- known as "post-sale" revenue -- fell 8 percent to $3.1 billion. Equipment sale revenue declined 15 percent to $1.3 billion, reflecting "weakened economic conditions around the world," Xerox said.
The Norwalk, Connecticut-based company, whose rivals include Oce NV
Because of the weak economy, some large clients have been hesitant about purchasing higher-end technology. Increased sales of lower-priced products has hurt gross margins.
In the fourth quarter, adjusted gross margin was 38.8 percent, down 1.7 points from a year earlier, Xerox said.
"This decline was almost entirely due to increased product costs driven by the rapid strengthening of the yen," the company said.
Xerox said it expects first-quarter earnings of 16 cents to 20 cents per share. Analysts, on average, had expected 24 cents.
Xerox shares were down 3.8 percent at $7.30 in light premarket trading. The shares closed on Thursday at $7.59 on the New York Stock Exchange, down about 5 percent since the company's last earnings report in October.
(Reporting by Franklin Paul; Editing by Derek Caney and John Wallace)
