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Xerox 2Q loss in line
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July 25, 2001: 12:24 p.m. ET
Troubled copier maker warns it won't be back in black until fourth quarter
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NEW YORK (CNNfn) - Financially troubled copier maker Xerox Corp. reported a second-quarter loss Wednesday that was in line with Wall Street forecasts but warned that a return to profitability will take longer than expected.
Xerox said it lost $68 million, or 10 cents a share, excluding one-time items. That matched the consensus forecast of analysts surveyed by earnings tracker First Call, but was well off the earnings of $201 million, or 27 cents a share, it reported a year earlier.
The company said it still expects to return to profitability in the second half of this year, but the weak economy now makes that more likely to happen in the fourth quarter than during the current period.
First Call's consensus forecast had called for earnings per share of 6 cents in the third quarter, compared with the 30 cent a share loss a year earlier, and fourth-quarter EPS of 24 cents, compared with a lose of 17 cents a share one year earlier.
The warnings sent shares of Xerox (XRX: down $0.06 to $7.93, Research, Estimates) down 10 cents in late morning trading Wednesday.
"I think the market is saying, 'Great gross margins, horrific top line, so it's a wash,'" Salomon Smith Barney analyst Jonathan Rosenzweig told Reuters Wednesday.
Including a restructuring charges and other special items, Xerox reported a net loss of $281 million, or 40 cents a share, for the quarter, versus net income of $202 million, or 27 cents a share, a year earlier.
Sales fell 13 percent to about $4.1 billion. Without the change in currency value sales would have been off 12 percent.
The Stamford, Conn.-based company has sold assets, cut jobs, shut down business units and halted dividend payments this year in a bid to stem losses.
On Wednesday, President and Chief Operating Officer Anne Mulcahy said customers are delaying purchasing decisions because of the weakened economy.
"We continue to expect a return to profitability in the second half of 2001," she said, "but the economic environment and normal third-quarter seasonality will likely delay this to the fourth quarter."
Mulcahy said Xerox is ahead of schedule in meeting its target of cutting $1 billion in costs, having achieved some 75 percent of the goal, including the reduction of 8,600 jobs worldwide since September. 
-- from staff and wire reports
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