ACS advances Xerox sales, profits

Completing its first full quarter with its new Affiliated Computer Services subsidiary, Xerox Corp. revenue was up 48 percent from a year ago to $5.5 billion, pushing profits to $236 million.

Norwalk-based Xerox acquired Dallas-based ACS in February. Including both companies”™ results from a year ago, second-quarter revenue was up between 2 percent and 3 percent on a consolidated basis. During the quarter, Xerox recorded a litigation expense of $36 million, after insurance proceeds, to settle claims by ACS shareholders arising from the acquisition.

California awarded Xerox a $1.6 billion contract in early May for ACS to manage the state”™s Medicaid management information system over 10 years.

During the quarter, Xerox reduced its headcount by 300 employees, primarily in North America, giving it 130,800 employees as of June 30. The most prominent employee to depart was Anne Mulcahy, who retired in May as chairman, with CEO Ursula Burns taking the role.

Also during the quarter, Xerox acquired from Hewlett-Packard Co. ExcellerateHRO L.L.P., a benefits administration and relocation services provider.