Xerox Cuts 2026 Operating Income Forecast to $450–475 Million
Key Facts
Xerox cut its 2026 adjusted operating income forecast to a range of $450 million to $475 million, from $555 million to $605 million, and lowered its free cash flow estimate to $50–100 million from about $250 million. The company announced the revisions with its third-quarter results, attributing the lower outlook to higher input costs, a shift in the mix of equipment sold, a weaker market outlook and lower-than-expected IT Solutions profits. The figures came as Xerox said revenue from print equipment grew and its adjusted operating margin doubled during the quarter. Those quarterly improvements, however, did not prevent it from lowering its full-year operating income and cash flow estimates. The revisions reflect pressure on profitability and liquidity expectations for the current year as the company continues to focus on reducing debt.
Xerox said higher input costs exceeded its expectations and that the equipment sales mix shifted from mid-range to entry-level devices. It added that the market outlook had weakened and that profits in its IT Solutions segment were below expectations. The company said print equipment recorded growth alongside a doubling of its adjusted operating margin, as it focused on stabilizing revenue, increasing profitability and reducing leverage. This highlights a divergence between print equipment performance and the sources of pressure management identified in its full-year outlook. The factors disclosed did not include separate numerical estimates of each one’s contribution to the forecast cut.
Alongside lowering its cash flow forecast, Xerox said it had suspended dividends on common and preferred shares as part of measures to preserve cash. The company linked the move to its focus on reducing debt, halting distributions as its 2026 free cash flow forecast stood at $50–100 million, down from about $250 million. It also announced an exchange of $174 million of senior notes due in 2028 for $121 million of secured notes due in 2030, plus $9 million in equity. The exchange is part of steps to address upcoming maturities, according to Investing.com. The transaction is expected to close on or around November 13, 2026.
The stock hit a session low of $1.57 on October 29, while trading volume reached 30,099,514 shares, compared with 7,845,690 shares in the previous session. Company data confirm the closing price and the session low, while trading volume shows increased activity in the stock alongside the decline. The share move followed the company’s announcement of a lower annual outlook, a dividend suspension and a notes exchange. Quarterly results showed growth in print equipment revenue and a doubling of the adjusted operating margin, but full-year operating income and cash flow estimates fell.