Why Xerox (XRX) Shares Are Falling Today

What Happened?

Shares of document technology company Xerox (NASDAQ:XRX) fell 15.9% in the afternoon session after the company announced a reduction in its quarterly dividend to $0.025 per share, or $0.10 annually, to improve its balance sheet and ensure sufficient capital is available to finalize its acquisition of Lexmark. 

Despite the dividend cut, the company offered a positive outlook. It reaffirmed its 2025 financial guidance, signaling confidence in the business. Management also anticipated that the Lexmark acquisition would contribute to adjusted earnings per share and free cash flow, indicating that the deal is expected to strengthen profitability and liquidity. 

Additionally, the company projected at least $238 million in cost and revenue synergies from the acquisition, achievable within two years.

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What The Market Is Telling Us

Xerox’s shares are very volatile and have had 28 moves greater than 5% over the last year. But moves this big are rare even for Xerox and indicate this news significantly impacted the market’s perception of the business.

Xerox is down 46.5% since the beginning of the year, and at $4.42 per share, it is trading 69.5% below its 52-week high of $14.48 from June 2024. Investors who bought $1,000 worth of Xerox’s shares 5 years ago would now be looking at an investment worth $253.30.

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