Xerox Warns Outlook Headwinds Have Intensified, Near-Term Pressure Worse Than Expected
XRX sits 90% above its 52-week low of $1.19 on elevated volume (2.9× avg).
Summary
Management said the headwinds hitting its outlook have intensified and near-term pressure is now greater than it expected, a direct walk-back of the tone from Q2, when Xerox returned to profitability and raised full-year guidance. The company is responding with actions and cost measures to mitigate these pressures, improve profitability, and preserve cash, and it is suspending its common and preferred dividends. It is also lowering its full-year adjusted operating income and free cash flow guidance. Q3 adjusted EPS came in at USD 0.02. The warning lands on the same day as the Q3 earnings call, which activist holder STARTEEPO (7.34%) had already targeted with a letter on October 19 pushing for a strategic review. With the stock at $2.26 and a small market cap, a guidance cut of any size is material, and the focus is on whether the board responds to STARTEEPO's review demand.
At the time of this announcement, XRX was trading at $2.26 on NASDAQ in the Technology sector, with a market capitalization of approximately $366.4M. The 52-week trading range was $1.19 to $3.78. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.