Xerox cuts outlook but raises dividend
NEW YORK (AP) — Xerox lowered its profit outlook for the current quarter Tuesday after determining the amount of a restructuring charge.
The printer and copier maker, which is also ramping up its business services division, also plans to return more cash to investors, increasing its dividend and stock buyback program.
Xerox now expects a fourth-quarter restructuring charge of $100 million, or 5 cents per share. It had said late last month that it expected to book a charge of $50 million to $100 million for the quarter ending in December, primarily focused on its services division.
The company now expects adjusted profit of 28 to 30 cents per share for the quarter, down from its prior guidance of 33 to 35 cents per share. Analysts polled by FactSet predict earnings of 32 cents per share.
For 2013, Xerox Corp. anticipates adjusted earnings of $1.09 to $1.15 per share, bracketing Wall Street's prediction of $1.12 per share.
It expects revenue to be unchanged to up 2 percent. Analysts expect revenue of $22.48 billion, an increase of less than 1 percent from their revenue prediction for 2012 of $22.34 billion.
Xerox is also raising its quarterly dividend by 1.5 cent, or 35 percent, to 5.75 cents and increasing its stock buyback program by $1 billion. Buybacks can make investors' stakes more valuable and support earnings per share.
The company plans to spend $900 million to $1.1 billion on buybacks in 2012 and will put at least $400 million toward buybacks next year.
Shares of the Norwalk, Conn., company rose 15 cents, or 2.4 percent, to $6.48 in premarket trading. Shares have slid 20 percent this year through Monday's close.