Xerox Reports Third-Quarter Earnings Oct 24, 2002

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Xerox Corporation said yesterday it had another quarter of strong operating cash flow and earnings driven by improved margins and increased product demand in key growth markets. The copier and document management technology corporation reported third-quarter earnings of U.S. $0.05 per share including restructuring charges of $0.06 per share. The third-quarter 2002 results are a $0.10 improvement from the third quarter of last year, which is said to reflect its effective execution of a strategy to significantly strengthen its business.

"Margins are up, costs are down and Xerox's streamlined business model is delivering sustainable profitability as well as strong operational cash generation," said Xerox Chairman And Chief Executive Officer (CEO) Anne M. Mulcahy. "Through our strengthened operations and superior offerings, we are winning customers' confidence, attacking competitors' share in our sweet spots of the market and building value for Xerox stakeholders."

Operational improvements led to gross margins of 42 percent, a year-over-year increase of 4.4 percentage points. Selling, administrative and general costs decreased $152 million or 13 percent from third quarter 2001.

The company continued to generate significant cash from operations, reporting $611 million in operating cash flow for the third quarter. As of the end of September, Xerox's worldwide cash balance was $2.3 billion.

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