Xerox Remake Progresses
Xerox Corp.'s reinvention of itself as a business-services outsourcer after a century focused on selling printers and copiers has shown signs of promise, but some investors remain unpersuaded about the company's growth prospects.</br></br>"Xeroxing" a document has become synonymous with photocopying it -- an increasingly irrelevant concept in today's digital-document age for the iconic Norwalk, Conn., company that has become a leader in the digital-imaging industry.</br></br>To boost its competitiveness, Xerox built a business that offers services to companies. That business now accounts for about half of the company's total revenue. This includes managing New Jersey's E-ZPass toll collection system and administering Procter & Gamble Co.'s employee benefits.</br></br>The cornerstone of Xerox's services strategy was its $6.4 billion acquisition last year of outsourcer Affiliated Computer Services, which more than doubled Xerox's headcount and has helped boost revenue in recent quarters. ACS handles business processes and information technology for companies and government agencies to help them cut costs and focus on their core operations.</br></br>Xerox has forecast revenue will rise 4% to 6% next year, as it expects both itself and ACS will win contracts that neither business could have competed for individually. Xerox also said the ACS deal would improve margins and bring in recurring revenue streams that generate a lot of cash for potential share buybacks.