Xeroxs share price jumped 39% after it posted a first quarter net income of 110m ($158m), boosted by strong colour sales and fourth quarter restructuring.


The company also recorded a smaller than predicted operating loss of 60m on revenues of 2.9bn, 7.7% lower than last year. Growth in the US was offset by a slight decline in Europe.


The markets faith in Xerox was inspired by its growth in the colour sector, particularly by the DocuColor 12 and 2000 series of printers.


President and chief operating officer Anne Mulcahy said: Its no secret that Xerox is leading a large-scale migration to colour. Investments continue to pay off with total colour revenue in the first quarter growing 16%. And in North America and Europe, colour grew 19%.


Xeroxs cost reduction and asset disposal programme continues apace with the 886m cash sale of half its stake in Fuji Xerox to Fuji Photo Film (PrintWeek, 9 March).


It also sold its Nordic lease receivables to Resonia for 255m (PrintWeek, 12 April) and is cutting its workforce by 4,300 to 88,000 worldwide.


Xerox chairman and chief executive Paul Allaire said: Weve already sold $2bn worth of assets with more in active negotiations. We are ahead of schedule in our efforts to take $1bn out of the cost base. We are executing every element of our recovery plan with precision.


The companys cash balance for the first quarter stood at 2.15bn compared to 1.18bn at the last quarter of 2000.
We are executing a successful turnaround that we expect will turnaround Xerox to profitability this year, said Allaire.


Story by John Davies