Big score for Xerox. Profit in Q1 !

Congratulations! see snippet below.

But why do a forecast and get "but cuts outlook" in the headline at Reuters?

In a world of Black Swans forecasting a year ahead is almost impossible. What happens if the Obama administration continues to get it right? Consider that the 'great financial meltdown" has been pretty much stabilized in less than a 100 days. LIBOR rates are reasonable. The wild swings in the market have slowed down. The necessary elimination of funny money is being managed without a major breakdown.

If healthcare is passed, my bet is that there will be a rush to exits from every global to small business, both start ups and going concerns. The real economy is driven by small business, not globals. Balance sheets without health care costs are going to be much better. Education is about to reorganize. Health is about to reorganize.

Of course, getting the timing just right is almost impossible. If you can't predict timing, all you can do is project from the past. But old economic models clearly don't work. Their predictive abilities have never been more discredited.

In the face of these realities, forecasts of revenue is a game played for Wall Street "analysts."
The game is "beat analysts' expectations" stock is supposed to go up. "Disappointed analyst's expectations" stock is supposed to go down. But stock price is supposed to be about the future, not the past. The only way to win is not to play the game.

Consider that when we announced new profit projections in March, the "analysts" changed their "analysis." Please, give me a break! Independent analysis is useful. Rewriting press releases is not. If we had a printernet, we could cut out the middleman.

Wall Street analysts had expected a profit of 4 cents a share, on revenue of $3.55 billion, but it was not immediately clear if results were comparable. Before Xerox late in March slashed its outlook, citing the effects of the weak economy, analysts had expected a profit of 17 cents a share.

One possibility might be to give forecasts in the form of "If - Then." It would be great if a real analyst would do the work. "If X happens, then we see a revenue of Y. If A happens, then we see a revenue of B."

"If - then" is the appropriate format for forward looking strategy. Forward looking strategy is a set of of "if - then" decision rules. Responsive strategy on the other hand, when you live in an environment of imperfect information, is a strong ethic of customer service and continuous product improvement. As in "if this decision violates these ethics, then probably don't do it.

In any case analysis, like science, is a set of clear "if, then" rules. If the analysts are too busy and overworked, then we should do it our selves.Until then we should say "We don't release revenue projections. That's proprietary information. Our core competitive advantage is that our predications are better than anyone else's. So, dear analysts, make your own best guess, just like you have to do for Google."

UPDATE 2-Xerox flips to quarterly profit, but cuts outlook from Reuters: "
* Q1 EPS 5 cts vs loss 27 cents
* year-ago quarter included big one-time charge
* Revenue fell 18 percent, equipment sales down 30 percent
* cuts 2009 EPS view to 50-55 cents from $1.00-$1.25

NEW YORK, April 24 (Reuters) - Xerox Corp (XRX.N) flipped to a profit in the first quarter, but the leading provider of digital printers and document management services forecast a second-quarter profit weaker than analysts' views and cut its full year earnings outlook nearly in half."