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Printer maker Xerox's profit beats Street on lower costs

Xerox
Tony Avelar | Bloomberg | Getty Images

Xerox, best known for its printers and copiers, reported a slightly better-than-expected quarterly profit as expenses declined 4 percent.

Restructuring and better productivity led to higher margins, Xerox said on Friday.

The company has been focusing on services to offset a drop in revenue as companies cut down on printing and as personal computing moves to tablets and smartphones.

Xerox said last month it was selling its information technology outsourcing arm to French IT services firm Atos for $1.05 billion to focus on building up faster-growing units, business process outsourcing (BPO) and document outsourcing.

The company bought Affiliated Computer Services Inc in 2009 to enter the services business, including BPO, IT services, cloud computing and data management.

Operating margin expanded to 10.4 percent in the in the fourth quarter ended Dec. 31 from 9.4 percent a year earlier.

Revenue from Xerox's services business increased 1.1 percent to $2.72 billion, while revenue from its printing business declined 8.1 percent.

Total revenue fell to $5.03 billion from $5.21 billion.

Net income attributable to Xerox fell to $156 million, or 13 cents per share, from $306 million, or 24 cents per share.

Excluding items, the company earned 31 cents per share.

Analysts on average had expected a profit of 29 cents on revenue of 5.07 billion, according to Thomson Reuters I/B/E/S.

Up to Thursday's close, Xerox shares had fallen about 28 percent in the last one year.