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AnonymousInactivehttp://online.wsj.com/article/BT-CO-20110201-713017.html
EXPENSIVE CONSUMABLES HELPS LEXMARK POST 46% 4Q PROFIT JUMP
NEW
YORK–Lexmark International Inc.’s fourth-quarter earnings surged 46%
on fewer charges and improved revenue, as the company benefited from
businesses buying its laser printers and print-service plans.The
Lexington, Ky., company also issued an optimistic first-quarter outlook,
prompting shares to jump as much as 10% on Tuesday.Lexmark–as with
other technology companies, including rival Xerox Corp.–has benefited
from businesses spending on technology upgrades after delaying these
purchases during the economic downturn. Lexmark’s prospects started
brightening in the fourth quarter of 2009 when it posted its first
year-over-year profit growth after two years of declines.”Our business
is seeing the positive impact in the key strategic investment in
technology and services along with the manufacturing and support
infrastructure reductions we have made over the last several years,”
Lexmark Chief Executive Paul Rooke said during a conference call with
analysts. Rooke took over from longtime CEO Paul Curlander, who plans to
retire in the spring.World-wide information-technology spending is
forecast to increase 5.1% to $3.6 trillion this year, according to
market-research firm Gartner Inc.For the first quarter, the company
expects per-share earnings of between $1.18 and $1.28 on revenue growth
of about 1%. Analysts polled by Thomson Reuters were looking for a
per-share profit of $1.14 on 1% revenue growth to $1.06 billion.Lexmark
shares, which have nearly tripled since July 2009, recently rose 9.6%
to $38.20.S&P Equity Research analyst Tom Smith upgraded his
stock-investment rating on Lexmark shares to buy from hold. He said
Lexmark is making progress in moving toward more value-added products,
including software, which will help to offset competitive pressures in
the printer industry.Lexmark is starting to reap benefits from
its acquisition of Perceptive Software Inc. for $280 million last May.
The deal allows Lexmark to offer a software platform as a core component
of its existing services.”While Perceptive Software only represents
about 2% of our fourth-quarter revenue, we expect it to grow faster than
the other parts of our business and become a larger share of our mix
over time,” Rooke said.For the fourth quarter, Lexmark reported a profit
of $87.6 million, or $1.10 a share, up from $59.8 million, or 76 cents a
share, a year earlier. Excluding restructuring and acquisition charges,
per-share earnings rose to $1.29 from $1.16. Revenue increased 3% to
$1.1 billion.The company in October projected adjusted per-share
earnings of between $1.03 and $1.13, topping estimates at the time, on
revenue growth in the low-single digits on a percentage basis.Lexmark
also said the impact of currencies on revenue was “relatively flat” in
the fourth quarter. By contrast, competitor Xerox’s fourth-quarter
results and 2011 outlook were hit by currency concerns. Xerox said last
week it continues to see headwinds from currencies, including a strong
Japanese yen against the U.S. dollar. -
AuthorFebruary 3, 2011 at 9:20 AM
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