The process is expected to be completed by this year’s end.
Advertisement
Moody’s Investor’s Service said it would put its ratings for Xerox on review for a possible downgrade, saying that the planned separation will result in two smaller, less diverse and less profitable companies than the existing Xerox. “As standalone companies, they will have compelling investment cases and be better positioned to capitalize on growth opportunities and expand margins and market share”.
Xerox Corp (NYSE:XRX) opened at 9.23 on Friday.
Xerox made official its plan to spin off its business process outsourcing operations as an independent company with $7 billion in annual revenue, succumbing to pressure from activist investor Carl Icahn months after he accumulated an 8 percent stake in the Norwalk-based printing and documents technology giant. However, quite like its peers in the document industry, XRX is increasingly grappling with decreased demand for paper-related systems and products. Sales from services, which includes business process and document outsourcing, fell 4.7 per cent to $10.1 billion.
Larger rival Hewlett Packard Enterprise Co also split its computer and printer businesses from its faster-growing corporate hardware and services operations past year to adjust to the post-PC computing era.
As part of an agreement with Icahn, three of his representatives will serve on the board of the services company after it has been spun off, the person briefed on the decision said.
For decades, Xerox built its business by inventing new machines-such as the photocopier and the laser printer-and pushing companies to buy more office machines supplied with pricey ink and toner.
“Xerox shares rose almost 6 percent to United States dollars 9.78”.
“We applaud Ursula Burns and Xerox’s Board of Directors for recognizing the importance of separating Xerox into two publicly-traded companies”.
Xerox also released its fourth quarter earnings on Friday, reporting that fourth quarter revenues were down 8 percent to $4.7 billions.
ACS reported $6.5 billion in sales and $349.9 million in net income for the year ended June 30, 2009, the last full year before being acquired. The companyÂ’s Services segment offers various business process outsourcing services, such as customer care, transaction processing, human resources, communication and marketing, and consulting and analytics services, as well as finance, accounting, and procurement services. Three equities research analysts have rated the stock with a sell rating, four have issued a hold rating and five have issued a buy rating to the company’s stock.
Advertisement
“Looking forward, we will continue to take actions that deliver value for shareholders and clients”.
