Xerox stock falls after profit forecast is cut

Shares of Xerox Corp. fell after the provider of printers and business services cut its full-year profit forecast as the economic slump in Europe crimped demand for technology.

Excluding some items, profit will be $1.07 to $1.12 a share this year, Norwalk, Conn.-based Xerox said Friday. That compared with a previous forecast of as much as $1.18. Analysts had estimated $1.11.

The economic slowdown, especially in Europe, led to a 4% second-quarter decline in Xerox’s sales of printers, supplies and other technology, when adjusting for currency changes. The company’s services business, helped by its 2010 acquisition of Affiliated Computer Services Inc., fared better, rising 7%.

“They’re exposed to Europe, and Europe is weak,” said Shannon Cross, an analyst with Cross Research.

Xerox shares fell 49 cents, or 6.8%, to $6.70, the lowest since July 2009. The stock has declined 16% this year.

Second-quarter net income dropped 3% to $309 million, or 22 cents a share, from $319 million, or 22 cents, a year earlier. Excluding some costs, earnings were 26 cents a share, matching analysts’ estimates.

Revenue climbed 1% to $5.5 billion. Analysts had estimated $5.6 billion.