Xerox posts better-than-expected quarterly profit

NEW YORK (Reuters) - Xerox Corp (XRX.N: Quote, Profile, Research) on Thursday posted better-than-expected quarterly earnings as revenue improved on strong sales of printing supplies and color equipment.

The company, the world's No. 1 supplier of digital printer and document management services, also said it would buy back another $1 billion of its own stock and maintained its full-year profit outlook.

Net income fell to $215 million, or 24 cents a share, from $266 million, or 28 cents a share, a year earlier.

Excluding restructuring costs, the profit was 29 cents a share, beating analysts' forecasts of 24 cents, according to Reuters Estimates.

Revenue rose 8 percent to $4.53 billion, outpacing analysts' estimates of $4.46 billion.

Xerox said the weak economy created "challenges for our business with large enterprises," but results from its small and mid-size business markets were positive. In addition, demand for document services has risen.

"Our annuity-based global business led to steady revenue growth this quarter along with earnings and cash in line with our expectations," Chief Executive Anne Mulcahy said in a statement.

Xerox stock has declined 15 percent so far this year, closing on Wednesday at $14.03. By contrast, shares of Japan's Canon (7751.T: Quote, Profile, Research) stock trading on the New York Stock Exchange are up 6 percent year to date.

Earlier, Canon posted a 12 percent decline in quarterly profit due to sluggish copier demand and a stronger yen. The company said demand was slow in North America for its office equipment, particularly copiers, and weakness was spreading to Europe.

(Reporting by Franklin Paul; Editing by Lisa Von Ahn)