Xerox, a company best known for its printers and copiers, but that is now trying to expand its corporate services business, said its 68-year-old chief financial officer, Lawrence Zimmerman, would step down next month. Luca Maestri, 47, who is Nokia Siemens Network's current CFO, will replace him.
The announcement raised more questions about Xerox on a day when it reported higher earnings and revenue, but failed to reassure investors about its outlook for early 2011.
The company's shares fell 91 cents to $10.49 on the New York Stock Exchange.
Zimmerman, the outgoing CFO, told Reuters in an interview the company's growth strategy will not change with his departure, but speculated the shares were down on Wednesday because of his retirement.
On Wall Street, there's always a pause when there's change, but this company is so well positioned that I consider this a blip on the radar screen, Zimmerman said.
Analysts said Wall Street would be less comfortable with the company without Zimmerman, who served as CFO for eight years and will now retire to his home in Colorado.
Investors really liked Larry and are concerned about the unknown, said Cross Research Analyst Shannon Cross.
Still, some analysts said his successor, Maestri, could help Xerox improve its position in international markets and said it was encouraging a quality candidate from another company would come to Xerox.
Maestri has experience in Europe and Asia Pacific which could be a positive to Xerox as they expand, said Gabelli & Company analyst Hendi Susanto.
While trying to build its presence abroad, Xerox is also trying to sell more services along with the equipment it makes. The company continues to work on restructuring programs related to its $5.5 billion acquisition of Affiliated Computer Services in 2009.
But its traditional equipment business accounts for the largest portion of its overall sales. Revenue in that segment fell slightly, undermining investor hopes a rebound in tech spending would filter through to Xerox's equipment sales.
Investors might have expected higher year-over-year growth on equipment sales in the technology business, especially if they had drawn some parallels with IBM's positive results, Gabelli & Company's Susanto said.
Last week, IBM's strong results raised optimism that global companies were becoming confident enough to spend more on technology.
The office document management company's revenue rose 42 percent to $5.98 billion from $4.22 billion a year earlier. Analysts were expecting revenue of $5.978 billion for the quarter, according to Thomson-Reuters I/B/E/S.
Xerox, which competes with Japan's Ricoh Co Ltd <7752.T> and Hewlett-Packard Co
Excluding costs for restructuring charges and acquisitions, the company's adjusted EPS was 29 cents a share, which beat analysts' average estimates by a penny, according to Thomson-Reuters I/B/E/S.
The company forecast 2011 earnings would be $1.05 to $1.10 a share, which is on the low end of the Thomson-Reuters I/B/E/S mean estimates of $1.10.
(Reporting by Liana B. Baker; editing by Derek Caney, Dave Zimmerman and Andre Grenon)