By Steve Gelsi
NEW YORK (Dow Jones) -- Xerox slashed its first-quarter earnings
target on Friday, as it grapples with an "increasingly more
challenging global economic environment."
Xerox (XRX) said it expects to post quarterly earnings of 3
cents to 5 cents a share, compared to its previous view of 16 cents
to 20 cents a share.
The reduction includes a 6-cent impact from its share of Fuji
Xerox's restructuring and a lower-than-expected profit contribution
from Fuji Xerox.
On average, analysts were expecting earnings of 18 cents a
share, according to a survey by FactSet Research.
The Norwalk, Conn.-based maker of printers and copier machines
cited an industry-wide slowdown in technology spending, putting
pressure on revenue and earnings.
Xerox's total revenue in January and February declined 18%,
including a 5-point currency impact, largely due to lower sales of
equipment and printer-based supplies.
"We expect that enterprise spending on technology will continue
to decline this year," said Anne Mulcahy, Xerox's chairman and
chief executive officer.
The company said it has identified an additional $300 million in
expense reductions, and that it's on track to deliver $250 million
in savings throughout this year from previous restructuring
actions.
Xerox is decreasing its total debt during the first quarter and
plans continued debt reduction during the year.
With access to a $2 billion line of credit, the company said it
would access the credit markets "only on an opportunistic
basis."
Xerox is scheduled to announce first-quarter earnings on April
24, at which time it will update its guidance for full-year
2009.
Shares of Xerox, which closed at $5.34 on Thursday, were down
about 4% in premarket trading Friday.