Few details offered on Xerox restructuring

ssloan@herald-leader.comJanuary 24, 2013 

Xerox, which has substantial operations in Kentucky, announced fourth-quarter and year-end earnings Thursday but offered few details on a previously announced restructuring.

Chief Financial Officer Luca Maestri said the company took a one-time charge of $93 million in the quarter for the restructuring of the services business, which includes the vast majority of Kentucky's operations.

Those operations were acquired by Xerox in 2010, when it purchased ACS, a major employer in Kentucky. Xerox now has about 5,000 employees here; that's less than 10 percent of its worldwide services employees.

The number of layoffs associated with the restructuring both globally or specific to Kentucky was not disclosed.

"Xerox now employs more people in Lexington and Kentucky than it did three months ago and is continuing to hire to respond to our clients' demand for our services," said spokesman Chris Gilligan. "We are well positioned to grow our operations in Kentucky and around the world."

Executive Lynn Blodgett told analysts the restructuring has not yet been finished.

"We made some good progress in the fourth quarter," said Blodgett, who oversees Xerox Services and previously led ACS when it was acquired by the company. "We are not finished. ... We are really focused on cost.

"We have a great revenue model and just need to make sure that our costs stay in line. So we have more work to do and we will see that through the balance of 2013."

For the quarter, revenue at the Norwalk, Conn.-based company, which is focused on outsourcing services and traditional printer hardware, fell 1 percent year over year in the fourth quarter to $5.9 billion. Quarterly earnings fell to $335 million, or 26 cents a share, from $375 million, or 26 cents a share, in the same quarter a year ago. The company repurchased $1.05 billion in shares in 2012, explaining why the earnings per share amounts did not change.

The services segment saw sales rise 7 percent year over year to $3.1 billion and now accounts for 52 percent of the company's overall revenue. The segment's profit margin of 11.2 percent grew compared to the prior year as the company's restructuring reduced costs.

For the full year, revenue was down 1 percent to $22.4 billion. Earnings were $1.2 billion, or 88 cents a share, down from $1.3 billion, or 90 cents a share, in 2011.

Scott Sloan: (859) 231-1447. Twitter: @HeraldLeaderBiz

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