Xerox Corp.(NYSE:XRX) profits fell 85% in the first quarter, hurt by higher restructuring charges, as its business remained challenged ahead of its planned separation.
Shares of Xerox fell 11% to $9.95 in morning trading in New York as the company also issued downbeat guidance for the current quarter and lowered its bottom line outlook for the year.
Chief Executive Ursula Burns said in prepared remarks that the company had accelerated its cost-cutting efforts amid declining revenue in the document technology segment, which she said had been pressured in the quarter with weak developing markets. The company said in its earnings release that it decreased its overall head count by 8,300 workers in the quarter.
Ms. Burns said the company expects to reap the benefits of those cuts in the second quarter. In the quarter reported Monday, the company’s restructuring costs jumped to $126 million from $14 million, eating into profit.
Xerox, synonymous with paper copiers and printers, has been transforming its business as sales of its signature products have declined amid an increasingly digital workplace. But expanding into areas that include document management and bill processing hasn’t been smooth, with Xerox posting a recent run of quarters with declining revenue.
Over all for the period ended March 31, Xerox logged a profit of $34 million, or three cents a share, down from $225 million, or 19 cents a share, in the year-ago period. Excluding certain items, such as restructuring related charges, the company posted earnings on a per-share basis of 22 cents.
The company had guided for per-share earnings between 21 cents and 24 cents, and analysts had projected 23 cents.