Xerox Q3 Loss Widens, Cuts Adj. Operating Profit View; Backs Revenue Outlook; Stock Down 39%

(RTTNews) - Shares of Xerox Holdings Corp. were losing around 39 percent in the morning trading on the NYSE after the company on Thursday announced a downward revision in fiscal 2026 adjusted operating income view, after reporting wider third-quarter loss. Further, the firm maintained annual revenue view, despite lower quarterly revenues.

The company attributed that the headwinds affecting outlook have intensified, creating greater near-term pressure than expected, resulting in outlook downgrade.

Separately, Xerox announced an exchange transaction to address around $174 million of its senior notes due in 2028, extending those maturities to 2030 while reducing overall debt principal and preserving cash.

Louie Pastor, chief executive officer at Xerox, said, "We are seeing results in the areas where we have focused our execution, but the headwinds affecting our outlook have intensified, creating greater near-term pressure than we expected. As a result, we are lowering our full-year adjusted operating income and free cash flow guidance. We're responding with actions and cost measures to mitigate these pressures, improve profitability, and preserve cash, including the suspension of our common and preferred dividends, while maintaining our focus on reducing debt."

In the third quarter, net loss attributable to shareholders was $1.019 billion or $7.73 per share, wider than loss of $764 million or $6.01 per share a year ago.

The latest results included a non-cash goodwill impairment charge of $955 million, or $6.87 per share, while last year's result included an inventory-related purchase accounting adjustment, related to the acquisition of Lexmark, of $85 million or $0.67 per share, as well as a tax expense charge of $467 million, or $3.69 per share.

Adjusted net income was $7 million or $0.02 per share, down from $0.20 per share last year.

Adjusted operating income climbed to $124 million from $65 million a year ago.

Revenue dropped 4.7 percent to $1.868 billion from $1.961 billion a year ago. On a constant currency basis, revenue fell 4.5 percent.

Sales were $954 million, down from $993 million a year ago. Print equipment revenue increased from last year.

Looking ahead for fiscal 2026, the company now projects adjusted operating income of $450 million to $475 million and revenues around $7.6 billion.

The company previously expected adjusted operating income of $555 million to $605 million.

In fiscal 2025, adjusted operating income was $248 million and revenues were $7.02 billion.

In the morning trading on the Nasdaq, the shares were losing around 39.32 percent to trade at $1.6950.

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