STAMFORD, Connecticut, Dec 11: Xerox Corp, warned Friday that Its fourth-quarter earnings may be as much as 40 per cent lower than Wall Street analysts projected, blaming Y2K worries and foreign currency problems, reports AP.

Investors immediately sent shares down nearly 15 per cent.

In a statement the document systems company stressed that its estimate was preliminary. However, results for October and November indicate the factors tliat brought about a drop in third-quarter earnings have intensified. Xerox said.

Analysts surveyed by First Call/Thomson Financial have been expecting earnings of 66 cents a share. But Xerox said it will fall well short of that.

The company blamed four • major factors:

— lagging sales of high-end products because of customer concerns about the Y2K problem;

— higher than anticipated expenses due to the effects of reorganizing its customer administration system;

—lower-than-anticipated profits from its Brazilian operations as a result of the continuing economic weakness following a major currency devaluation earlier this year: and the strengthening of the US dollar against European currencies and lower sales productivity in the US and Europe.

"While I am disappointed with these adverse developments. the primary reasons are clearly unrelated to long-term fundamentals." said Rick Thoman, Xerox president and CEO.