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Xerox Corp fell short on revenue but beat estimates for profit on the back of cost-cutting in its first full quarter under new management backed by activist investors Carl Icahn and Darwin Deason.

The U.S. photocopier, which is facing a long-running decline in its core business, reported net profit that roughly halved and said revenue fell 5.8 per cent year-on-year to $2.35 billion in the third quarter ended Sept. 30, below an average analyst estimate of $2.42 billion.

Operating cash flow for the quarter, however, rose and the company increased its 2018 share repurchase target to $700 million from $500 million and forecast for full-year free cash flow to between $900 million and $1 billion.

“Clearly, our priority to drive revenue requires the most effort,” Chief Executive Officer John Visentin, who worked as a consultant to Icahn in the proxy fight, said on a call with analysts.

“We are putting in place actions to sustainably improve our revenue performance. These start with building a more simplified, agile organizational structures and include further expanding our channel presence...,” he said.

Xerox has struggled with falling demand for office printing equipment as the popularity of smartphones reduced the need to print, and the company agreed in January to a $6.1 billion merger with Fuji Xerox, its 56-year-old joint venture with Fujifilm.

But the complex deal ran into strong opposition from Icahn and Deason and in May the photocopier pioneer scrapped the merger and handed management control to the activist investors.

Shares of the Norwalk, Connecticut-based company that have fallen about 9 per cent this year so far, rose marginally in early trading on Tuesday.

Fujifilm, which was to take a majority stake in the combined company as part of the deal, has sued Xerox, winning an appeal last week giving the Japanese company leverage to bring Xerox management back to the negotiating table.

“We don’t believe (the appeals court’s ruling) means very much for Xerox, because Xerox terminated that transaction for reasons unrelated to the injunctions,” said Visentin.

Net income attributable to Xerox fell to $89 million, or 34 cents per share, in the third-quarter ended Sept. 30, from $179 million, or 68 cents per share, a year earlier, hurt by higher taxes.

Excluding items, the company reported earnings of 85 cents per share, beating the average analyst estimate of 78 cents, according to Refinitiv data.