Xerox cuts its 2026 profit and cash flow outlook and suspends its dividends

The company now expects adjusted operating income of $450 million to $475 million, down from a prior range of $555 million to $605 million.

Xerox cut its full-year profit and cash flow forecasts and suspended payouts on both its common and preferred shares, as chief executive Louie Pastor said pressures on the business have grown. He said the headwinds have intensified, creating more near-term strain than the company expected. The dividend suspension and cost measures are meant to preserve cash and reduce debt.

Adjusted operating income for 2026 is now expected at $450 million to $475 million, against a prior range of $555 million to $605 million. Free cash flow is now expected at $50 million to $100 million, down from about $250 million. Revenue for the year is expected at about $7.6 billion.

Third-quarter earnings were $0.02 a share, $0.06 better than analysts expected. Revenue was $1.87 billion, against $1.88 billion expected.

The cuts are harder to read as a one-quarter problem. Xerox's 10-Q filings show pro forma revenue fell 3.7% in the first quarter and 6.5% in the second. Over the same periods the Lexmark acquisition added about 32 percentage points to reported growth. Reported revenue therefore leans on a purchase while the underlying base contracts.

By suspending the dividends, Xerox puts repairing its balance sheet ahead of payments to shareholders, common and preferred alike.