Office equipment maker Xerox Corp. on Tuesday posted strong growth in fourth-quarter earnings, beating analysts expectations, on a resurgence in demand for color and digital printers.
The results suggest more positive returns are in store throughout the imaging sector, where companies such as Canon Inc., and Lexmark International Inc., have already or are expected to show more demand for home and office printing machines.
Shares of Xerox rose to $14.14 in pre-market trade, up from a close of $13.95 on Monday on the New York Stock Exchange.
Stamford, Connecticut-based Xerox said fourth-quarter net income rose to $222 million, or 22 cents a share, from $19 million, or 1 cent a share, a year earlier.
The most recent quarter included a 3-cent a share gain from a reduced litigation reserve, Xerox said.
Revenue rose about 1 percent to $4.29 billion from $4.25 billion. The revenue reflected a benefit of 6 percentage points from the positive effect of the weak dollar, which boosts the value of overseas sales when they are converted into dollars.
Analysts had forecast a profit of 15 cents a share, on revenue of $4.18 billion, according to Reuters Research, a unit of Reuters Group Plc.
Xerox over the past year has picked up momentum and seen its share price rise as it distances itself from years of accounting scandals and other internal troubles with strong sales of its core products.
In the quarter, equipment sales grew 11 percent, including a benefit from the weak dollar of 7 percentage points. Some 60 percent of all equipment sales in the quarter was generated from products launched in the past two years, the company said.
However, revenue growth continues to be constrained by declining sales of supplies and services to customers who still use Xerox's older machines.
Shares of Xerox reached a more than three-year high of $14.28 reached about two weeks ago.