What Happened?
Shares of document technology company Xerox (NASDAQ: XRX) fell 7.2% in the morning session after the company reported third-quarter results that missed revenue expectations, overshadowing a significant beat on profit.
The document technology company posted revenue of $1.96 billion, falling short of analyst estimates of $2.03 billion. While this represented a strong 28.3% increase year-on-year, the miss on the top line appeared to be the primary concern for investors. This disappointment came despite Xerox reporting an adjusted profit of $0.20 per share, which was substantially better than the consensus forecast of a loss of $0.18 per share. The market's negative reaction suggests that investors were more focused on the sales shortfall as a potential indicator of weaker demand, despite the company's better-than-expected profitability during the quarter.
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What Is The Market Telling Us
Xerox’s shares are extremely volatile and have had 38 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 20 days ago when the stock dropped 5% on the news that President Trump threatened a 'massive increase in tariffs' on Chinese imports, reigniting fears of a renewed US-China trade war.
The unexpected comments, made in response to Beijing's plans to tighten export controls on rare-earth minerals, reversed early market gains and sent major indices tumbling. Rare-earth minerals are crucial for components used in the electronics and automotive industries. The tech sector led the losses, with the tech-rich Nasdaq Composite falling 1.7%. The threat jolted Wall Street, sparking concerns that escalating trade tensions could disrupt global supply chains and increase costs for many technology companies that rely on components or manufacturing from China.
Xerox is down 62.4% since the beginning of the year, and at $3.11 per share, it is trading 68.4% below its 52-week high of $9.84 from January 2025. Investors who bought $1,000 worth of Xerox’s shares 5 years ago would now be looking at an investment worth $178.65.
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