Xerox stock soars 20%
The printing and copying giant said profits for 2009 would be about what analysts expect; cautions that extraordinary volatility of dollar could impact results.
NEW YORK (CNNMoney.com) -- Shares of document services and imaging company Xerox Corp. rose nearly 20% Monday after the company said it is in a strong position and its 2009 profit would be roughly in line with analysts' forecasts.
The Norwalk, Conn.-based Xerox (XRX, Fortune 500) said profits would be in a range of $1 to $1.25 per share, which is roughly in line with consensus estimates of $1.16 a share, according to Thomson Financial.
The company said its expectations reflect the "extraordinary volatility" of the dollar but added that it is sufficiently capitalized to weather the economic and financial downturn.
"These are extraordinary times," said Anne Mulcahy, Xerox chief executive officer, during a conference with investors in New York Monday. "But fear has overtaken the facts: We have a strong business model and there has never been a time in which that has been more important."
Xerox's stock soared 19.1% to $6.25 in mid-afternoon trading on the news. Still, the stock is down 60% since the beginning of 2008 as investors feared economic headwinds would cut into demand for the company's products and services.
But Mulcahy said the company's low stock price does not reflect the strength of the company. She said Xerox's recent restructuring efforts will save the company $200 million next year and she remains confident that its backlog of product orders and multi-year document services contracts will carry the company through an uncertain economic climate.
"We are making significant cost reductions with care," Mulcahy said. "It will allow us to meet our immediate financial goals and when the economy recovers, it will allow us not to walk, but to run."
The company also said its commitment to innovation throughout the financial crisis has helped Xerox maintain its customer base and will put the business in a stronger position coming out of the economic downturn.
For instance, Xerox has developed a line of printers that use solid ink rather than traditional toner. The company said customers are embracing the new technology because it costs much less and produces 95% less waste than standard ink cartridges.
"Companies are excited about our new products not because of the 'whiz-bang' technology, but because they need cost savings now," said Ursula Burns, Xerox president, who is in line to eventually become CEO. "It's important that we remain ahead of the industry in innovation." 
