Xerox Corp. (XRX) recently announced that one of its fully owned subsidiaries, ACS, has acquired the call center and business process services assets of Italy-based Innova Consulting. The assets comprise a 180-person call center and business process capability in the city of Cagliari on the island of Sardinia.
The new acquisition is a part of the company’s strategy to expand its footprint in Europe thereby, enhancing its global capabilities. The deal will improve ACS’ customer care services such as inbound call center support, help desk services and back office processing capabilities to clients in the region.
Innova Consulting was originally established to provide call center and back offices services to the Italian customers of Zurich Connect. Consequently, the newly acquired arm of ACS has entered into a five-year agreement worth $32 million with Zurich Connect, the direct-to-customer and online insurance brand of Zurich Financial Services Group, to provide outsourcing services in the Italian market.
Xerox has pursued a number of acquisitions in the current year, aimed at capitalizing on the growing markets (both domestic and foreign) in order to strengthen its financial performance in the upcoming quarters. Some important acquisitions include Xerographic Solutions, Education Sales and Marketing, LLC, Midwest Business Solutions Inc., Premier Office Equipment Inc., United Business Solutions and Florida Imaging & Network Systems.
In the last reported quarter, Xerox earned adjusted net income of $393 million or 27 cents per share compared with $342 million or 24 cents per share in the year-ago quarter. Revenues increased marginally by 2% year over year to $5.61 billion, driven by lower sales. The company expects to witness better performance going forward based on its attempt to grow and expand its business, particularly Business Process Outsourcing.
Consequently, Xerox has projected adjusted earnings in the range of $1.07 to $1.12 per share for full-year 2011. However, intensifying competition and availability of substitutes for the company’s products have put the company on the back foot.
Thus, the shares of Xerox Corp. are maintaining a Zacks #3 Rank, which translates into a 'Hold' recommendation in the short term (1 to 3 months) and we reiterate our recommendation of “Neutral” for the long term (more than 6 months).
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