Xerox

Microeconomics

Mondays and Wednesdays

Xerox Swings to Loss, but Sales Soar 33% on Services Acquisition

“The Wall Street Journal April 24-25, 2010”

In this article it talks about the company Xerox who is a big company in the printing and coping business. The Xerox Corp. swung to a first quarter loss because of acquisition and restructuring cost, but posted a 33% jump in sales thanks in large part to the purchase of Affiliated Computer Services Inc. or ACS. Last quarter Xerox closed its $6.4 billion acquisition with ACS. With this acquisition it expanded their services to offering payrolls, accounts payable, technology outsourcing, and other corporate functions and more than double it services revenue in the first quarter. In last quarter sales in its services segment reached $1.8 billion and represented nearly 40% of its total revenue, a significant shift from 2009, when services represented just 23% of revenue.

I think was a really good acquisition for Xerox due to the fact that they started to taper off in the market. With this take over they are really able to expand their services that they can offer their customers and generate much more in their services department. The company says it expects per-share earnings between 20 cents and 22 cents a share in the second quarter and full – year earnings between 75 cents and 85 cents. So this seemed to be a really good more for them.

So with this being said on a supply and demand curve graph

• Change in taste and preferences

• Zerox is now able to offer more services

• There for there is an increase in demand for their service

• Increase in Demand = Increase in quantity and in Increase in Price