Xerox issues profit warning

Xerox issued a profit warning yesterday following a slump in customer spending on office technology.

The vendor lowered its first-quarter 2009 earnings expectations to a range of three cents to five cents per share from a range of 16 cents to 20 cents per share. Revenue declined 18 percent in January and February, largely due to lower sales of equipment and printer-based supplies, says the firm.
“We expect that enterprise spending on technology will continue to decline this year,” said Anne Mulcahy, Xerox chairman and CEO in a statement.
Despite stating that the company was confident that it would be able to grow market share in the “challenging environment,” Mulcahy said Xerox would be “expediting further cost savings that help to offset the economic impact on revenue while fuelling our operating cash flow.”
Xerox cut 3,000 jobs in October and plans to trim its annual expenditure by a further $300m (£207m) by implementing a hiring freeze, a halt to pension contributions, a pay freeze, a cut in overtime, and reductions in spending on travel expenses, transport and logistics.
No additional job cuts are planned at the moment, a spokesman told Forbes.
Earlier this month, Canon cut its 2010 profit target to account for falling demand for its cameras and copiers.