Lexmark Second-Quarter 2014 Earnings Fall 88%

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Lexmark Second-Quarter 2014 Earnings Fall 88%

 user admin 2014-07-24 at 12:36:28 pm Views: 234
  • #29721

    Lexmark Second-Quarter 2014 Earnings Fall 88%
    Lexmark profit slides; adj. results top forecast

    By Anna Prior

    Lexmark International Inc. said its second-quarter earnings fell 88% as the printer company's year-earlier period included a benefit from the sale of its inkjet business, masking a slight increase in revenue.

    Adjusted results, however, topped Lexmark's own forecast, and the company increased its outlook for the year.

    For the full year, Lexmark now expects revenue that is flat to down 2% year-over-year, compared with its previous forecast for a decline of 2% to 4%, while adjusted earnings are expected to be $3.95 to $4.15 a share, versus Lexmark's prior forecast for $3.80 to $4.00 a share.

    The company, like others in the technology industry, has spent years wrestling with a maturing hardware market, facing squeezed margins and weaker growth from developed economies. Unlike many of its competitors, however, Lexmark has worked to stick to its core business and add software around it. That approach is different from peers such as Xerox Corp., which have diversified further afield with new offerings, such as outsourcing.

    Lexmark reported a profit of $37.5 million, or 59 cents a share, down from $94.1 million, or $1.47 a share, a year earlier.

    Excluding acquisition and divestiture-related adjustments, among other items, adjusted per-share earnings slipped to 99 cents from $1.04.

    Revenue edged up less than 1% to $891.8 million.

    The company in April had forecast an adjusted profit of 85 cents to 95 cents a share on a revenue decline of 2% to 4%, saying at that time it expected a "continued negative impact" from its decision to exit its inkjet business.

    Operating expenses climbed 40% to $288.8 million, as the year-earlier quarter benefited from the sale of inkjet-related technology and assets.

    Looking ahead to the third quarter, Lexmark said it expects to record adjusted per-share earnings of 85 cents to 95 cents, and revenue that is flat to down 2% compared with a year earlier. Analysts polled by Thomson Reuters predicted earnings of 95 cents a share on $867 million in revenue.