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Ikon Sales, Profit Down But In Line With Expectations

Solution provider Ikon's sales and income for its most recent financial quarter declined from the same quarter a year earlier but matched analysts' expectations.

The Valley Forge, Pa.-based company said sales for its quarter ended Sept. 30 reached $1.17 billion, compared with $1.2 billion for the year-ago quarter. The company reported a $26 million profit, compared with $32 million for the same period a year ago.

Sales and earnings per share of 17 cents matched the average of estimates posted by Wall Street analysts.

Matthew Espe, Ikon's chairman and CEO, said the quarterly results reflect a series of slow summer months as well as a bid by the company to aggressively price deals in an effort to win new business. Espe also said the period-"Ikon's fourth fiscal quarter-"saw the company win a record number of new customers.

Ikon maintains its position as the largest independent U.S. dealer for Canon, Lake Success, N.Y., and Ricoh, West Caldwell, N.J. Those companies, like most document hardware vendors, increasingly have been focusing on color document products. Ikon's results show that the focus is translating into a product shift in the channel.

"Color [equipment sales] growth was 19 percent in the quarter, representing 23 percent of equipment revenues in the fourth quarter," Espe said. "Color copies continue to grow at a double-digit pace and with our installed base at less than 5 percent [using] color, this technology cycle offers significant equipment and aftermarket opportunity going forward."

During the quarter, Ikon embarked on a new integrated solution portfolio of document management services in its Enterprise Services unit, partnering with several other vendors including EMC's Documentum unit. The company's executives said they view that direction as a promising source of future revenue.

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