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Digital shift helps Xerox
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October 22, 1998: 7:39 a.m. ET
Global woes slow copier sales but printers, scanners more than fill the gap
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NEW YORK (CNNfn) - The shift in Xerox Corp.'s core business from copiers to digital products continued in the third quarter of 1998, boosting otherwise sagging sales and helping the one-time copy behemoth to meet earnings forecasts, the company said Thursday.
Xerox earned $381 million or $1.05 per share in the three months ending Sept. 30, an 18-percent increase from $320 million or 89 cents per share in the applicable period of 1997. Analysts polled by estimate trackers First Call had expected the company to bring in $1.04 per share.
Revenue edged 5 percent higher to $4.6 billion from $4.37 billion a year ago.
The company primarily attributed the improvement to "outstanding growth in digital product revenues" as well as tighter operating margins.
Revenue from Xerox's catalog of digital products - like printers and scanners - grew 38 percent in the quarter, once again exceeding the revenue from the company's traditional photocopier business.
Black-and-white photocopier income pulled the total figures down, declining 15 percent due to what Chairman and CEO Paul A. Allaire called "weaker global economic conditions."
According to Allaire, economic tumult in Brazil and Russia alone was responsible for knocking 2 percent off the company's revenue growth.
Xerox saw the global situation creating further short-term pressures ahead, but looked toward an upturn in Europe and Japan to ease the sales pressure.
"The recent strengthening of the European and Japanese currencies should benefit our earnings for the balance of the year and in 1999," said Allaire in a joint statement with Xerox President and CEO G. Richard Thoman.
For the year to date, earnings increased 16 percent to $1.07 billion or $2.98 per share from the applicable year-ago period, not counting a $1.1 billion special charge for restructuring and discontinued operations.
After the second-quarter charge, Xerox reported a net loss of $219 million, 77 cents per share, in the year-to-date period.
Revenue in the nine-month period grew to $13.7 billion from $12.7 billion a year ago.
Xerox stock (XRX) slipped 2-3/4 on Wednesday to close at 93-9/16. 
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Xerox Corp.
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