Office equipment maker Xerox Corp. (XRX) on Wednesday reported a first-quarter net loss of $64 million and an 11 percent drop in revenues, using its old accounting methods, but said its figures were subject to change under an agreement with federal regulators.

Stamford, Connecticut-based Xerox said its net loss per share was 9 cents. Excluding costs related to restructuring, Xerox posted a net profit of $53 million, or 7 cents per share. For the same period in 2001, Xerox said its net income was $202 million, or 25 cents a share.

Analysts surveyed by Thomson Financial/First Call on average forecast a loss of 1 cent per share, with estimates ranging from a loss of 3 cents to a profit of 3 cents.

Revenue, after the effect of currency translations, fell 11 percent to $3.7 billion from $4.2 billion in the first quarter of 2001. Analysts on average had forecast revenues of about $3.75 billion, according to research firm Multex.

"I am encouraged by our first-quarter progress and believe that we have clearly set the stage for a return to full-year operational profitability," said Anne Mulcahy, Xerox chairman and chief executive, in a statement.

Shares of Xerox closed at $9.54 on Tuesday. Since the start of the year, the stock has fallen about 11 percent, and underperformed the S&P 500, which has slipped about 4 percent.


Xerox, which is working to return to profitability while facing tough competition and slowing corporate spending, said its figures were subject to change under a settlement with the Securities and Exchange Commission.

Earlier this month, the SEC charged that Xerox for four years used its accounting to distort financial results. Under the settlement, Xerox paid a penalty of $10 million, but did not admit or deny any wrongdoing, and agreed to restate its results from 1997 through 2000, and adjust 2001 figures.

Xerox has until June 30 to file its 2001 annual report and first-quarter 2002 fiscal figures.

Xerox said the data released on Wednesday is unaudited and based on the company's previous accounting methodology, which the SEC believes does not comply with Generally Accepted Accounting Principles (GAAP).

The restatement will reflect adjustments in the timing and allocation of lease revenue, which will be reallocated among equipment, service, supplies and finance revenue streams as appropriate by applying a methodology different from the one the company had used during those years.

Xerox said it had about $4.7 billion in worldwide cash at the end of March after repaying $550 million of first-quarter maturing debt. It said its debt net of cash was $12.3 billion, or 17 percent less than in the first quarter of 2001.

Many Xerox watchers are keenly eyeing Xerox's debt status. The company, best known for its printers and photocopiers, faces an Oct. 22 deadline for its debt, after which the 57 banks involved in its revolving credit agreement could declare a payment default and take legal steps to recover the funds.

Xerox says it expects to complete the refinancing by June.