Xerox 1Q adjusted profit tops Wall Street views

NORWALK, Conn. (AP) -- Xerox's first-quarter net income fell 5 percent as it dealt with higher-than-expected investments in its government health care business and lower revenue in its document-technology business.

Its profit adjusted to exclude one-time items, however, topped Wall Street estimates. But the company said Tuesday that it was lowering its full-year earnings forecast due to increased costs in its government health care business.

Xerox earned $281 million, or 23 cents per share, for the three months ended March 31. That compares with $296 million, or 23 cents per share, a year ago.

It earned 27 cents a share after excluding 4 cents per share in costs related to amortization of intangibles.

That topped the 24 cents per share in adjusted earnings that analysts surveyed by FactSet expected.

Chairman and CEO Ursula Burns said in a statement that Xerox's investments in its government health care business were more than expected due to new Medicaid and health insurance exchange platforms.

Revenue for the Norwalk, Conn., company slipped 2 percent to $5.12 billion from $5.2 billion. Wall Street forecast $5.17 billion.

Document-technology revenue fell 4 percent to $2.05 billion from $2.14 billion. Revenue for the segment also declined in the fourth quarter.

Revenue for the services business — which made up the majority of total revenue — was basically flat.

Going forward, Xerox Corp. now foresees full-year adjusted earnings of $1.07 to $1.13 per share. Prior guidance was for $1.10 to $1.16 per share. It anticipates second-quarter adjusted earnings of 25 cents to 27 cents per share.

Wall Street is looking for full-year earnings of $1.13 per share and second-quarter earnings of 28 cents per share.

Xerox said that it is boosting its full-year stock buyback expectations to at least $700 million. It previously anticipated at least $500 million in share repurchases.

The company's stock added 9 cents to $11.56 in morning trading.