STAMFORD, Conn. – Xerox Corp. (XRX), which makes copiers, printers, scanners and fax machines, on Thursday said first-quarter earnings fell 13 percent, reflecting last year's gain on the sale of its ContentGuard business, and indicated second-quarter profit will be in line with estimates.
Earnings after preferred dividend payments fell to $196 million, or 20 cents a share, for the January-March period from $224 million, or 25 cents a share, last year. That reflects preferred dividends of $14 million in the latest period and $24 million in the year-ago. Excluding the gain from the ContentGuard sale, earnings from continuing operations lsat year were $165 million, or 17 cents a share.
Revenue fell 1 percent to $3.77 billion from $3.83 billion.
Analysts surveyed by Thomson Financial expected Xerox to earn 19 cents a share on sales of $3.86 billion.
"Our profit performance in the first quarter met the high range of our expectations through increased gross margins and operational improvements that help ensure Xerox is cost-competitive in every area of our business," said Anne M. Mulcahy (search), Xerox chairman and chief executive, in a statement.
Xerox said first-quarter color revenue rose 15 percent, while equipment sales were flat. Revenue growth continued to be hurt by post-sale revenue declines from the company's older light-lens technology. Weak performance in Brazil also impacted post-sale and total revenue in the first quarter, although trends are improving in this operation, Xerox said.
First-quarter gross margins were up nearly 1 percent to 40.7 percent.
Xerox expects second-quarter earnings of 21 cents to 24 cents a share, in line with analysts' estimates for earnings of 23 cents.
Shares of Xerox fell 4 cents to $13.68 on the New York Stock Exchange (search). The stock has traded between $12.55 and $17.24 over the past year.