Xerox Holdings Corporation (NASDAQ:XRX) Q2 Earnings Miss, Expands Inkjet Portfolio with Kyocera Deal

Xerox Holdings Corporation reported Q2 revenue of $1.58 bln, beating estimates, but missed adjusted EPS of -$0.64. The company re-enters the cut-sheet inkjet market with an agreement to source Kyocera's production presses. XRX's stock is available for $3.90 with a 14.57% dividend yield. Some investors have purchased shares, signaling confidence in the company's future progress.

Title: Xerox Holdings Corporation: Q2 Revenue Beat, EPS Miss, and Strategic Moves

Xerox Holdings Corporation (XRX) reported its Q2 financial results on September 2, 2025, with mixed performance. The company's revenue of $1.58 billion exceeded analyst expectations, but it missed adjusted earnings per share (EPS) of -$0.64. Despite the EPS miss, Xerox has taken strategic steps to re-enter the cut-sheet inkjet market by securing a production agreement with Kyocera.

The stock price of Xerox is currently trading at $3.90, offering a 14.57% dividend yield. Some investors have shown confidence in the company's future progress by purchasing shares. This move comes after S&P Global Ratings downgraded Xerox to a 'B' rating from 'B+' due to concerns about weaker free cash flows and revenues [1]. The rating agency expects Xerox's core free operating cash flow (FOCF) to remain negative over the next 12 months, despite potential improvements from the Lexmark integration. However, S&P believes Xerox has sufficient liquidity to service its debt and cover maturities over the next 24 months.

Xerox's strategic move to re-enter the cut-sheet inkjet market with Kyocera's production presses could be a significant step in diversifying its revenue streams and addressing the challenges in the print industry. The company anticipates fully recovering the tariff impact on operating income by 2026, assuming current rates remain unchanged. Additionally, Xerox is focusing on integrating Lexmark and stabilizing revenues to return to positive core cash flow.

The stock's 14.57% dividend yield is attractive for income-focused investors, although the stock's price action around the ex-dividend date has been volatile [2]. Barrington Research has a bullish case for ACCO Brands, with a 53% upside target, citing debt reduction, share repurchases, and improving earnings forecasts. Despite sector rotation leaving many consumer goods stocks languishing, ACCO Brands offers a rare combination of a 7.7% dividend yield and improving fundamentals.

In conclusion, while Xerox faces challenges in the print industry and integrating Lexmark, its strategic moves and attractive dividend yield make it an interesting investment opportunity for those willing to look beyond short-term volatility.

References
[1] https://www.investing.com/news/stock-market-news/xerox-downgraded-to-b-from-b-by-sp-on-cash-flow-concerns-93CH-4217338
[2] https://www.ainvest.com/news/acco-brands-misunderstood-buy-opportunity-sector-rotation-dividend-stability-2508/