Xerox raises 2009 outlook

Xerox Corp. rose for a third straight day in New York, the longest streak in three months, after saying sales of paper, toner and supplies would lift 2009 earnings.

Xerox, the world's largest maker of color printers, climbed 93 cents, or 15 percent, to $7.15 at 12:09 p.m. in New York Stock Exchange composite trading. It has risen about 36 percent since Nov. 21, marking the first three-day streak since August 11.

Xerox is relying on its supply and service sales, 74 percent of total revenue, to boost cash and pay down $1.6 billion in debt next year. The recurring revenue stream should help the company counter a slowdown of new printer sales. The Norwalk, Connecticut-based company forecast 2009 profit of $1 to $1.25 a share on Nov. 24, compared with analysts' average estimate of $1.15, according to a Bloomberg survey.

"If people have the machines they're going to use ink at a certain rate, even if they don't make a new round of hardware purchases," said Tom Smith, an equity analyst with Standard & Poor's in New York. He upgraded the stock to "hold" after the company's Nov. 24 meeting. "Xerox cleared up a little of the uncertainty about its earnings next year."