Xerox returns to profit

Anne Mulcahy is predicting higher sales

Xerox has made its first full-year profit after years of restructuring and questions about its accounting practices.

The flow through from our accelerated cost reductions in the fourth quarter will further strengthen our bottom line

Anne Mulcahy, Xerox chief executive

The office equipment company surprised Wall Street by announcing a net profit of $19m for the last three months of 2002, compared with a loss of $140m a year earlier.

Analysts had been expecting the firm to make a loss in the final quarter of the year.

The firm's cost-cutting and demand for its new products helped it cope with tough competition and weaker spending on copiers and other machines.

Driving up sales

Xerox made a profit of £91m for the full year.

The news pleased investors and shares rose 16% to $9.32 on Tuesday morning.

"Cutting costs and generating earnings is quite an accomplishment for this company," said Tim Ghriskey, president of Ghriskey Capital Management.

Xerox's chairman and chief executive Anne Mulcahy said she expected the company's expansion of products, solutions and services to continue to lift sales.

"The flow through from our accelerated cost reductions in the fourth quarter will further strengthen our bottom line," she said.