Xerox Corp. (XRX) Chairman and Chief Executive Anne M. Mulcahy will give up day-to-day oversight of the company she helped turn around, retiring July 1 and being succeeded as CEO by President Ursula M. Burns.
Mulcahy, 56 years old, will continue to serve as chairman of the board. She became CEO eight years ago when the company was struggling after a string of quarterly losses amid falling market share and a probe regarding Xerox's accounting practices.
0:00 /3:55Xerox sees spending
Burns was seen by many as Mulcahy's heir-apparent since her election as President of Xerox (XRX, Fortune 500) in 2007.
"This has been long expected, long telegraphed," said Shannon Cross, of Cross Research. "I think it's a pretty seamless transition, I don't expect many changes."
Xerox spokesman Carl Langsenkamp said Mulcahy places tremendous value on succession planning, and has "prepared Xerox for the time when she chose to retire."
The company is being pinched by the global spread of economic weakness as well as by the stronger dollar, because it gets most of its revenue from overseas. Xerox makes printers both for offices and large-scale production, but garners most of its sales from its services businesses, which include maintenance contracts, printing supplies and lease revenues.
"It has been a privilege leading Xerox," Mulcahy said in a statement. "The decision to move on is made easy only in the fact that Ursula Burns is so well positioned to take Xerox to the next level. Our strategy is sound and well defined. And, despite a tough economy, we are generating cash, building our technology and services pipeline and poised for a period of steady profitable growth in the future."
Mulcahy joined Xerox in 1976 as a sales representative, four years before the 50-year-old Burns came on board as a mechanical engineering summer intern. Burns became president in April 2007, a post she will not keep. Xerox's Langsenkamp said the company doesn't intend to name a president.
Shares were recently down 6 cents, or 0.7%, to $6.85. Despite a rebound in the past two months, the stock is still off by 50% in the last year.
Thursday, May 21, 2009
Monday, May 18, 2009
American Express to cut 4,000 jobs
American Express said Monday it will cut 4,000 jobs, or 6% of its global workforce, as part of an $800 million restructuring plan.
Under the plan, the financial services company will also cut investment spending and operating costs.
The 4,000 cuts are on top of the 7,000 positions the company said in October it would eliminate, according to American Express spokeswoman Joanna Lambert.
American Express' (AXP, Fortune 500) first-quarter earnings call in April had indicated further job cuts were imminent, Lambert said. The reductions will occur across business units, markets and staff groups.
"Cuts were largely expected, but it's a sizable amount," said Jason Arnold, analyst at RBC Capital Markets.
0:00 /1:01Ending credit card debt
While the company "has remained solidly profitable," it continues "to be very cautious about the economic outlook and are therefore moving forward with additional reengineering efforts to help further reduce our operating costs," chief executive Kenneth Chenault said in a prepared statement.
Severance and other costs related to the job cuts will result in a $180 million to $250 million pre-tax restructuring charge.
Cuts in marketing and business development are expected to save $500 million, while operating cost reductions should save $125 million, the company said.
The cuts are in addition to the $1.8 billion cost benefit announced in October, and the tone of Monday's release was "a little more guarded" than that of previous announcements, Arnold noted.
Credit crunch
"Our concern is that the credit issues in this country are substantial," Arnold said. "AmEx especially gets a lot of its revenue from spending, which is obviously under severe pressure."
Especially troubling, Arnold said, is the company's percentage of charge-offs - when a creditor writes off an account balance as a "bad debt" instead of an asset, usually after six months of non-payment.
AmEx's charge-offs are in the upper range compared with its competitor group, at 9.9% Arnold said.
JPMorgan Chase (JPM, Fortune 500) and Discover (DFM) have charge-offs of around 8%. Still, Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500)'s rates exceed 10%, Arnold said.
"None of these charge-off rates are good numbers," Arnold said. "Unfortunately, with unemployment and the economic climate being what they are, it's a tough time for spending."
Under the plan, the financial services company will also cut investment spending and operating costs.
The 4,000 cuts are on top of the 7,000 positions the company said in October it would eliminate, according to American Express spokeswoman Joanna Lambert.
American Express' (AXP, Fortune 500) first-quarter earnings call in April had indicated further job cuts were imminent, Lambert said. The reductions will occur across business units, markets and staff groups.
"Cuts were largely expected, but it's a sizable amount," said Jason Arnold, analyst at RBC Capital Markets.
0:00 /1:01Ending credit card debt
While the company "has remained solidly profitable," it continues "to be very cautious about the economic outlook and are therefore moving forward with additional reengineering efforts to help further reduce our operating costs," chief executive Kenneth Chenault said in a prepared statement.
Severance and other costs related to the job cuts will result in a $180 million to $250 million pre-tax restructuring charge.
Cuts in marketing and business development are expected to save $500 million, while operating cost reductions should save $125 million, the company said.
The cuts are in addition to the $1.8 billion cost benefit announced in October, and the tone of Monday's release was "a little more guarded" than that of previous announcements, Arnold noted.
Credit crunch
"Our concern is that the credit issues in this country are substantial," Arnold said. "AmEx especially gets a lot of its revenue from spending, which is obviously under severe pressure."
Especially troubling, Arnold said, is the company's percentage of charge-offs - when a creditor writes off an account balance as a "bad debt" instead of an asset, usually after six months of non-payment.
AmEx's charge-offs are in the upper range compared with its competitor group, at 9.9% Arnold said.
JPMorgan Chase (JPM, Fortune 500) and Discover (DFM) have charge-offs of around 8%. Still, Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500)'s rates exceed 10%, Arnold said.
"None of these charge-off rates are good numbers," Arnold said. "Unfortunately, with unemployment and the economic climate being what they are, it's a tough time for spending."
Monday, May 4, 2009
Stocks rally on recovery hopes
Stocks rallied Monday morning as investors welcomed stronger-than-expected reports on housing and construction spending, adding to bets that the economy is closer to stabilizing.
The Dow Jones industrial average (INDU) gained 148 points, or 1.8%, around 45 minutes into the session. The S&P 500 (SPX) index added 16 points, or 1.9%. The Nasdaq composite (COMP) rose 25 points, or 1.5%.
The March pending home sales index from the National Association of Realtors jumped 3.2% from the prior month versus forecasts for a flat reading.
Construction spending, a government report, rose 0.3% in March versus forecasts for a decline.
Banks: Financial shares are likely to be choppy ahead of the release of the government's "stress tests" on Thursday. The government will release details on the 19 individual companies tested as well as the broad group of corporations.
The results are expected to include estimated loan losses in the event that the economy deteriorates further, along with an estimate of how much more capital banks would need to raise in such an environment.
Citigroup (C, Fortune 500) is reportedly among the banks that will need to generate more money to stay afloat. The bank may have to raise another $10 billion, according to the Wall Street Journal.
Autos: Italian carmaker Fiat, which recently completed an alliance with Chrysler, is eyeing a deal with the European unit of General Motors (GM, Fortune 500).
Companies: Shareholders descended upon Berkshire Hathaway's (BRK.A) annual meeting over the weekend. At the meeting, chief executive Warren Buffett said the firm expects to report a first-quarter operating profit.
Sprint Nextel (S, Fortune 500) reported surprise income excluding unusual items. Shares rose 14% in early trading.
Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.16% from 3.15% Friday. Treasury prices and yields move in opposite directions.
Other markets: In global trading, Asian markets ended higher and European markets rallied in afternoon trading.
In currency trading, the dollar fell versus the euro and gained against the yen.
U.S. light crude oil for June delivery rose 61 cents to $53.01 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery rose $16.80 to $905 an ounce.
The Dow Jones industrial average (INDU) gained 148 points, or 1.8%, around 45 minutes into the session. The S&P 500 (SPX) index added 16 points, or 1.9%. The Nasdaq composite (COMP) rose 25 points, or 1.5%.
The March pending home sales index from the National Association of Realtors jumped 3.2% from the prior month versus forecasts for a flat reading.
Construction spending, a government report, rose 0.3% in March versus forecasts for a decline.
Banks: Financial shares are likely to be choppy ahead of the release of the government's "stress tests" on Thursday. The government will release details on the 19 individual companies tested as well as the broad group of corporations.
The results are expected to include estimated loan losses in the event that the economy deteriorates further, along with an estimate of how much more capital banks would need to raise in such an environment.
Citigroup (C, Fortune 500) is reportedly among the banks that will need to generate more money to stay afloat. The bank may have to raise another $10 billion, according to the Wall Street Journal.
Autos: Italian carmaker Fiat, which recently completed an alliance with Chrysler, is eyeing a deal with the European unit of General Motors (GM, Fortune 500).
Companies: Shareholders descended upon Berkshire Hathaway's (BRK.A) annual meeting over the weekend. At the meeting, chief executive Warren Buffett said the firm expects to report a first-quarter operating profit.
Sprint Nextel (S, Fortune 500) reported surprise income excluding unusual items. Shares rose 14% in early trading.
Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.16% from 3.15% Friday. Treasury prices and yields move in opposite directions.
Other markets: In global trading, Asian markets ended higher and European markets rallied in afternoon trading.
In currency trading, the dollar fell versus the euro and gained against the yen.
U.S. light crude oil for June delivery rose 61 cents to $53.01 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery rose $16.80 to $905 an ounce.
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