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Tuesday, 23 October, 2001, 16:25 GMT 17:25 UK
Xerox losses widen
Xerox chief executive Anne Mulcahy
Anne Mulcahy was drafted in turn Xerox around
Troubled office equipment giant Xerox has unveiled an increase in quarterly losses.

But the legendary US copier maker, which was last year dogged by rumours of bankruptcy, said it was "cautiously optimistic" about returning to the black in the current quarter.

The figures were broadly in line with Wall Street expectations and follow a warning earlier this month of reduced sales, in the wake of the 11 September terror attacks.

The company said it had axed 11,000 jobs worldwide since last October as part of a radical cost-cutting programme designed to return it to profitability.

Credit rating agencies have not been impressed. Standard & Poor's on Tuesday downgraded Xerox to "junk" status - an action that will increase Xerox's borrowing costs - following similar moves by two other credit rating agencies.

"Improved operations"

On Tuesday, the firm said it had made a third-quarter net loss of $211m on sales of $3.9bn.

That compares with losses of $191m on sales of $4.5bn in the same period of last year.

Sales in the company's developing markets, including Latin America, were down 43%.

The company has made a loss for five quarters in a row.

Xerox chief executive Anne Mulcahy said: "Despite expected revenue declines, our results in July and August exceeded expectations, evidence of our much improved operations.

"However, the dramatic economic downturn since the events of 11 September resulted in an unprecedented loss in September, driven by disproportionate revenue decreases during the last two weeks of the month."

EU probe

Meanwhile, the European Commission has invited comments on the take-over of Xerox's Office Business unit by Singapore-based Flextronics International.

The contracting-out of certain manufacturing tasks is one of Xerox's main ways of saving money.

The commission has until 14 November to clear the deal or open an in-depth probe into it, which could take four months.

See also:

12 Oct 01 | Business
Forecast losses double at Xerox
26 Jul 00 | Business
Xerox warning unsettles Wall Street
16 Jun 00 | Business
Warning hits Xerox shares
19 Apr 01 | Business
Xerox results suggest turnaround
04 Apr 01 | Business
Xerox delays annual report
09 Jan 01 | Business
Xerox denies bankruptcy report
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