Xerox Takes $100 Million Charge, but Plans 2013 Dividend
Xerox said on Tuesday it would take a fourth-quarter restructuring charge of about $100 million, at the top end of a previously forecast range, but said it will raise its quarterly dividend next year.
The company, historically known for printers and copiers, will take the charge in its services business, which handles anything from toll systems to Medicare.
Xerox said it expects fourth-quarter earnings of 24 cents to 26 cents per share or adjusted earnings of 28 cents to 30 cents per share, including the charge.
The company said in October it would take a restructuring charge of $50 million to $100 million to account for a tougher economy as both government and corporate customers tighten budgets.
"We have seen an impact from weakness particularly in Europe on our technology business but we're seeing strong revenue growth and improving earnings in our services businesses," Ursula Burns, Xerox's CEO Ursula Burns told CNBC on Tuesday.
More than half of Xerox's revenue comes from services, after it bought Affiliated Computer Services Inc for $5.5 billion in 2009, but investment in those operations has put pressure on margins.
Xerox expects services to grow to two-thirds of revenue by 2017, "not only driven by the fact we are growing that portion of the business but because the market's transitioning, customers are transitioning," Burns said. "They want more than a point solution."
The company had forecast a fourth-quarter profit of 29 cents to 31 cents per share and adjusted earnings of 33 cents to 35 cents per share, excluding the charge.
Xerox said on Tuesday it increased its share buyback program by $1 billion and will raise its dividend by 35 percent to 5.75 cents per quarter, beginning with the dividend payable on April 30, 2013.
— Reuters contributed to this report.
