MALVERN, Pa.- -IKON Office Solutions, the world’s largest independent channel for document management systems and services, today announced that it expects to report first quarter fiscal 2008 diluted earnings per share in the range of $0.15 to $0.17. This compares to the company’s previously communicated guidance of $0.22 to $0.24 per diluted share.
The change in outlook for the first quarter is largely due to lower than anticipated equipment revenue and a higher than expected tax rate. Equipment revenue is expected to fall short of the company’s expectations primarily due to fewer large transactions closing in the quarter, and lower than expected overall placements. The tax rate was approximately 44% for the quarter, primarily driven by a tax law change in Canada, but is expected to be less than 33% for the full fiscal year.
For the quarter, total revenue is expected to decline 1% year over year. On a positive note, the company anticipates that Customer Service and Supplies revenue grew year over year, that Managed and Professional Services revenue continued to deliver strong revenue growth, and that Europe continued to grow.
“We attribute our equipment revenue performance to lower than expected sales productivity, which we are addressing immediately. We continue to believe that our focus on color is the right strategy for IKON, and see no fundamental reason why we can’t grow revenue in fiscal 2008. If our second fiscal quarter revenue performance does not improve, we will take further actions,” said Matthew J. Espe, IKON’s Chairman and Chief Executive Officer.
The company plans to announce its first quarter fiscal 2008 results on January 24, 2008.
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