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AnonymousInactivehttp://www.kentucky.com/2011/02/07/1625750/dell-still-lexmarks-biggest-buyer.html#more
DELL IS 10% OF LEXMARK’s BUSINESS (DOWN FROM 2009)
Computer
maker Dell remained the top customer of Lexington-based printer maker
Lexmark International in 2010. Dell accounted for 10 percent of
Lexmark’s revenue during the year, down from 12 percent in 2009.Lexmark
manufactures printers for Dell, which then sells them under the Dell
brand. That business, commonly called OEM for original equipment
manufacturer, has declined in recent years. Dell accounted for 13
percent of revenue in 2008 after having been 15 percent in 2005, 2006
and 2007, when Lexmark’s total revenue was higher than it is today.The
declines, though, have some upside, said Ed Crowley, founder of
Versailles-based printer-industry research firm The Photizo Group.”Quite
honestly, it wouldn’t surprise me if that wasn’t OK with them,” he said
of Lexmark management, explaining that profit margins are typically
lower on OEM products than on printers sold under a company’s own
name.”As a smaller player … you’re going to want to get some
high-margin business,” Crowley said. “Margin becomes more important than
volume. That will drive a lot of decision-making.”Perceptive Software
Lexmark
announced Tuesday that its recently acquired Perceptive Software
business generated revenue of $22 million in the fourth quarter. That
was up 11 percent from the third quarter, executives said. The
Kansas-based company develops software that helps businesses manage
content. During the fourth quarter, Perceptive released its first
application co-developed with Lexmark called “Interact.”Research spending up
For
the first time in several quarters, Lexmark spent more on research and
development year over year. During the quarter, the company spent $96.7
million, up from $93.3 million a year ago.Chief Financial Officer John
Gamble Jr. told analysts that the increase came because of the
acquisition of Perceptive Software. Before that, the company had been
consolidating some projects, which led to the decline in spending.No stock repurchases
For
the second consecutive year, Lexmark did not repurchase any of its
outstanding stock in 2010. Before 2009, the company had been
aggressively buying back stock, including spending more than $1 billion
in 2005 to buy 17 million shares.The company halted purchases in recent
quarters as much of its cash is overseas, and it would have to pay a
certain amount to be able to bring it back to the United States to fund
share repurchases.The company had billed the program as a way to return
value to shareholders, but some industry observers were
skeptical.Crowley said Lexmark’s moves the past two years are wise.
Given its smaller size compared to rivals like HP and Canon, the company
should spend its cash “on development and buying other companies, which
I think drive more shareholder value long-term.”Printers hailed by critics
Lexmark
has been calling attention to critical praise of its recent laser and
inkjet printer lines. In an internal assessment released during the
earnings period, Lexmark announced its printers earned 24 percent of
industry awards in 2010 while its next closest competitor earned 13
percent.The company also began 2011 by having its new Genesis all-in-one
inkjet printer recognized at the Consumer Electronics Show. The printer
boasts new scanning technology that essentially uses a camera to take a
snapshot of documents that need to be scanned. It replaces the common
older scanning method in which a scanner moves more slowly across an
image.http://www.kentucky.com/2011/02/07/1625750/dell-still-lexmarks-biggest-buyer.html#more
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AuthorFebruary 9, 2011 at 9:40 AM
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