Comments on: XRX: Xerox Asks Investors to Ignore the Accountant Behind the Curtains http://stockmarketbeat.com/blog1/2007/01/23/xrx-xerox-asks-investors-to-ignore-the-accountant-behind-the-curtains/ Our beat: The stock market. Our job: Beat it. Mon, 08 Sep 2008 00:48:10 +0000 http://wordpress.org/?v=2.2.1 By: IM: Ingram Micro’s Charge is a True One-Timer - Stock Market Beat - Our beat is the stock market. Our job is to beat it. http://stockmarketbeat.com/blog1/2007/01/23/xrx-xerox-asks-investors-to-ignore-the-accountant-behind-the-curtains/#comment-16918 IM: Ingram Micro’s Charge is a True One-Timer - Stock Market Beat - Our beat is the stock market. Our job is to beat it. Thu, 01 Mar 2007 15:17:26 +0000 http://stockmarketbeat.com/blog1/2007/01/23/xrx-xerox-asks-investors-to-ignore-the-accountant-behind-the-curtains/#comment-16918 [...] We have been very critical of companies taking charges and asking investors to ignore them. However, the charge Small Cap Watch List and Mid Cap Watch List member Ingram Micro announced in an 8K Filing this morning is a good example of when investors should look past the charge. In its recently-filed report on Form 10-K, Ingram Micro Inc. (the “Company”) stated its expectation that it would be required to record a charge for commercial taxes on software imports for the period January 2002 to December 2005 if proposed tax legislation in Brazil was enacted in the form in which it was submitted to the Brazilian president for signature on February 9, 2007. On February 28, 2007, the subject legislation was enacted and became law. As a consequence, the Company will record a charge to cost of sales in the first quarter of 2007 of approximately $33.3 million, consisting of $6.0 million for commercial taxes assessed for the period January 2002 to September 2002, and $27.3 million for such taxes that could be assessed for the period October 2002 to December 2005. All sums expressed above are based upon the exchange rate as of February 28, 2007 of 2.118 Brazilian Reais to the U.S. Dollar. The subject legislation provides that such taxes are not assessable on software imports for the period after January 1, 2006. The Company does not anticipate recognizing any income tax benefits for this charge, which will negatively affect the effective tax rate for the first quarter of 2007. An effective tax rate of 28% is estimated for subsequent quarters of 2007.Based on this event, the Company is adjusting its net income guidance for the first quarter, which ends March 31, 2007, to reflect the charge of $33.3 million or $0.19 per diluted share. Net income including this charge now is expected to range from $30 million to $37 million, or $0.17 to $0.21 per diluted share. First-quarter revenue guidance is not affected by this charge. [...] […] We have been very critical of companies taking charges and asking investors to ignore them. However, the charge Small Cap Watch List (Track at Marketocracy) and Mid Cap Watch List (Track at Marketocracy) member Ingram Micro announced in an 8K Filing this morning is a good example of when investors should look past the charge. In its recently-filed report on Form 10-K, Ingram Micro Inc. (the “Company”) stated its expectation that it would be required to record a charge for commercial taxes on software imports for the period January 2002 to December 2005 if proposed tax legislation in Brazil was enacted in the form in which it was submitted to the Brazilian president for signature on February 9, 2007. On February 28, 2007, the subject legislation was enacted and became law. As a consequence, the Company will record a charge to cost of sales in the first quarter of 2007 of approximately $33.3 million, consisting of $6.0 million for commercial taxes assessed for the period January 2002 to September 2002, and $27.3 million for such taxes that could be assessed for the period October 2002 to December 2005. All sums expressed above are based upon the exchange rate as of February 28, 2007 of 2.118 Brazilian Reais to the U.S. Dollar. The subject legislation provides that such taxes are not assessable on software imports for the period after January 1, 2006. The Company does not anticipate recognizing any income tax benefits for this charge, which will negatively affect the effective tax rate for the first quarter of 2007. An effective tax rate of 28% is estimated for subsequent quarters of 2007.Based on this event, the Company is adjusting its net income guidance for the first quarter, which ends March 31, 2007, to reflect the charge of $33.3 million or $0.19 per diluted share. Net income including this charge now is expected to range from $30 million to $37 million, or $0.17 to $0.21 per diluted share. First-quarter revenue guidance is not affected by this charge. […]

]]> By: Restructuring Charges - Financial Education - Everything You Need To Know About Finance http://stockmarketbeat.com/blog1/2007/01/23/xrx-xerox-asks-investors-to-ignore-the-accountant-behind-the-curtains/#comment-15355 Restructuring Charges - Financial Education - Everything You Need To Know About Finance Wed, 21 Feb 2007 20:00:02 +0000 http://stockmarketbeat.com/blog1/2007/01/23/xrx-xerox-asks-investors-to-ignore-the-accountant-behind-the-curtains/#comment-15355 [...] In addition, some companies tend to take restructuring charges so frequently that they appear to be an ongoing expense, as suggested in this article at Stock Market Beat: Xerox Reports Fourth-Quarter 2006 Earnings: Financial News - Yahoo! Finance [...] […] In addition, some companies tend to take restructuring charges so frequently that they appear to be an ongoing expense, as suggested in this article at Stock Market Beat: Xerox Reports Fourth-Quarter 2006 Earnings: Financial News - Yahoo! Finance […]

]]> By: TPX: Tempur-Pedic Not Resting on its Laurels - Stock Market Beat - Our beat is the stock market. Our job is to beat it. http://stockmarketbeat.com/blog1/2007/01/23/xrx-xerox-asks-investors-to-ignore-the-accountant-behind-the-curtains/#comment-12276 TPX: Tempur-Pedic Not Resting on its Laurels - Stock Market Beat - Our beat is the stock market. Our job is to beat it. Tue, 30 Jan 2007 04:19:22 +0000 http://stockmarketbeat.com/blog1/2007/01/23/xrx-xerox-asks-investors-to-ignore-the-accountant-behind-the-curtains/#comment-12276 [...] XRX: Xerox Asks Investors to Ignore the Accountant Behind the Curtains [...] […] XRX: Xerox Asks Investors to Ignore the Accountant Behind the Curtains […]

]]> By: 2007 January 30 - Stock Market Beat - Our beat is the stock market. Our job is to beat it. http://stockmarketbeat.com/blog1/2007/01/23/xrx-xerox-asks-investors-to-ignore-the-accountant-behind-the-curtains/#comment-12267 2007 January 30 - Stock Market Beat - Our beat is the stock market. Our job is to beat it. Tue, 30 Jan 2007 03:09:03 +0000 http://stockmarketbeat.com/blog1/2007/01/23/xrx-xerox-asks-investors-to-ignore-the-accountant-behind-the-curtains/#comment-12267 [...] XRX: Xerox Asks Investors to Ignore the Accountant Behind the Curtains [...] […] XRX: Xerox Asks Investors to Ignore the Accountant Behind the Curtains […]

]]> By: James Bailey http://stockmarketbeat.com/blog1/2007/01/23/xrx-xerox-asks-investors-to-ignore-the-accountant-behind-the-curtains/#comment-12144 James Bailey Mon, 29 Jan 2007 00:40:49 +0000 http://stockmarketbeat.com/blog1/2007/01/23/xrx-xerox-asks-investors-to-ignore-the-accountant-behind-the-curtains/#comment-12144 Good points from Christa. Your also missing the dedication people in the company have to Xerox. I dare say Christa work for Xerox and her beleif in the company isn't untypical. One more point, services will lead to an increasing part in the companies fortunes and these are again more profitable in the later stages of a contract. As this is a relatively new (in terms of XGS) area, Xerox should see greater returns from this area in the future. Good points from Christa. Your also missing the dedication people in the company have to Xerox. I dare say Christa work for Xerox and her beleif in the company isn’t untypical.

One more point, services will lead to an increasing part in the companies fortunes and these are again more profitable in the later stages of a contract. As this is a relatively new (in terms of XGS) area, Xerox should see greater returns from this area in the future.

]]> By: Christa Carone http://stockmarketbeat.com/blog1/2007/01/23/xrx-xerox-asks-investors-to-ignore-the-accountant-behind-the-curtains/#comment-11913 Christa Carone Fri, 26 Jan 2007 23:21:50 +0000 http://stockmarketbeat.com/blog1/2007/01/23/xrx-xerox-asks-investors-to-ignore-the-accountant-behind-the-curtains/#comment-11913 When assessing Xerox's financial performance, it's important to understand these key facts. Here's the view from Xerox: - First Call estimate for Xerox's Q4 earnings was 37 cents. That number did not include restructuring. While Xerox provided guidance on restructuring for Q4, analysts posted an adjusted EPS number that excluded any impact from restructuring. Compared to First Call and Xerox's own Q4 guidance, Xerox did exceed expectations for the quarter at 38 cents adjusted EPS. - About 70 percent of Xerox's total revenue comes from post-sale -- the annuity stream from supplies (toner, ink) and service for Xerox products. To boost the annuity stream, Xerox is focused on increasing the installs of its products, especially color multifunction printers and digital color presses. Considering the price pressures in the industry, it's not unusual to see dips in equipment sale revenue. Xerox is increasing the placement of products and broadening its product portfolio. Many of the products are sold at lower prices but Xerox continues to maintain margins in its range of 40-41 percent. For example, Xerox installed 35 percent more color multifunction devices and 74 percent more color publishing presses in 2006. - Xerox is seeing rapid declines in revenue from its older black-and-white light lens (analog) business as it accelerates customers' transition to all digital devices. This transition takes time and does have an impact on the company's annuity revenue. In Q4, the drag from light lens cost the company 2 percent of post-sale growth. For the full year and without the impact from currency, Xerox grew post-sale 2 percent. As the impact from light lens diminshes and as the flow through from the placement of color products picks up, Xerox expects to see steady growth in its annuity stream, which boosts total revenue. - All the key metrics: color, services, post sale and install activity are trending in the right direction. - Xerox grew earnings by 17 percent - and has committed to earnings expansion of another 10-15 percent in 2007. - The company generated $1.6 billion in operating cash flow in 2006. And, it returned to investment grade last year. - Since launching its stock buyback program in October 2005, it has repurchased about 100 million shares, totaling $1.5 billion of the $2 billion program. We believe the facts tell a positive story about the company's long-term value. When assessing Xerox’s financial performance, it’s important to understand these key facts. Here’s the view from Xerox:

- First Call estimate for Xerox’s Q4 earnings was 37 cents. That number did not include restructuring. While Xerox provided guidance on restructuring for Q4, analysts posted an adjusted EPS number that excluded any impact from restructuring. Compared to First Call and Xerox’s own Q4 guidance, Xerox did exceed expectations for the quarter at 38 cents adjusted EPS.

- About 70 percent of Xerox’s total revenue comes from post-sale — the annuity stream from supplies (toner, ink) and service for Xerox products. To boost the annuity stream, Xerox is focused on increasing the installs of its products, especially color multifunction printers and digital color presses. Considering the price pressures in the industry, it’s not unusual to see dips in equipment sale revenue. Xerox is increasing the placement of products and broadening its product portfolio. Many of the products are sold at lower prices but Xerox continues to maintain margins in its range of 40-41 percent. For example, Xerox installed 35 percent more color multifunction devices and 74 percent more color publishing presses in 2006.

- Xerox is seeing rapid declines in revenue from its older black-and-white light lens (analog) business as it accelerates customers’ transition to all digital devices. This transition takes time and does have an impact on the company’s annuity revenue. In Q4, the drag from light lens cost the company 2 percent of post-sale growth. For the full year and without the impact from currency, Xerox grew post-sale 2 percent. As the impact from light lens diminshes and as the flow through from the placement of color products picks up, Xerox expects to see steady growth in its annuity stream, which boosts total revenue.

- All the key metrics: color, services, post sale and install activity are trending in the right direction.

- Xerox grew earnings by 17 percent - and has committed to earnings expansion of another 10-15 percent in 2007.

- The company generated $1.6 billion in operating cash flow in 2006. And, it returned to investment grade last year.

- Since launching its stock buyback program in October 2005, it has repurchased about 100 million shares, totaling $1.5 billion of the $2 billion program.

We believe the facts tell a positive story about the company’s long-term value.

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