Xerox, known best as a maker of copiers and printers, yesterday revealed plans to buy back up to $500 million (€417 million) of its common stock over the next year as it reported third-quarter earnings dragged down by one-off charges.

The company's stock buy-back, its first in eight years, lifted Xerox's shares more than 6 per cent during trading yesterday.

The news came as Xerox, which employs about 2,700 people in Ireland, said third-quarter earnings fell 63 per cent from a year ago mainly because of charges related to a licensing lawsuit, damages from Hurricane Katrina and more restructuring. Apart from the charges, results were in line with analysts' expectations.

Anne Mulcahy, chief executive, anticipates fourth-quarter earnings of 25-29 cents per share.

Xerox has all but completed its transformation into a digitally-led company. It has invested heavily in new technology such as colour equipment with the aim of yielding higher margins in "post-sale revenue", or business from toner, paper and services.

But in the past year, the company has stumbled on weaker sales of higher-margin large office equipment as it shifts its mix of products and rolls out new digital technology.

Third-quarter net income fell to $49 million, or five cents a share, including charges and other items, from $149 million, or 17 cents a share, last year.

Total revenue grew 1 per cent to $3.8 billion compared with last year.