Lexmark’s Net Rises 10%….Despite Lower Revenue
Lexmark
International Inc.’s fourth-quarter net income surprisingly rose 10%
though sales fell as the business segment’s results failed to offset
slumping consumer demand.The news sent shares rallying in premarket
trading, climbing to $32.50 from Monday’s closing price of $29.34.
The
Kentucky printer maker recorded net income of $99 million, or $1.04 a
share, compared with $89.9 million, or 91 cents a share, a year
earlier. The results included restructuring charges of 25 cents and 14
cents, respectively.Revenue fell 4.3% to $1.31 billion from $1.37
billion. The company in October projected per-share earnings excluding
items of 50 cents to 60 cents on revenue down by the low-to-mid single
digits. The latest mean estimates of analysts polled by Thomson
Financial were for earnings of 58 cents a share on revenue of $1.3
billion.”Although EPS greatly exceeded expectations in the fourth
quarter, we have more work to do as we continue to implement our
strategy to drive our growth in higher usage segments,” said Chairman
and Chief Executive Paul J. Curlander.Lexmark’s gross margin rose to
33.4% from 30.8%. The company’s business-segment revenue climbed 4% to
$800 million. But the consumer segment reported a 15% decline to $509
million.Lexmark, citing “a very challenging” consumer market situation
in the third quarter, said it planned to move 1,650 jobs to low-cost
countries by the end of 2008, a move which it expects to save $40
million this year, and $60 million annually after that.
Eastman
Kodak Co. increased competition in the market for inkjet printers last
year by introducing its long-awaited line of printers, with ink
cartridges priced far less than its competitors. Industry watchers
believed that would cause trouble for inkjet-printer makers, especially
second-tier vendors like Lexmark.Looking forward, Lexmark expects
first-quarter earnings excluding items of 80 cents to 90 cents a share,
compared to 96 cents a share in the prior year. Revenue is expected to
be down in the mid- to high-single digit percentage range. Analysts
expected first-quarter per-share earnings of 80 cents, with revenue
falling 5% to $1.2 billion.Lexmark said Tuesday it didn’t repurchase
its stock in the latest quarter. The company’s remaining share
repurchase authorization was about $295 million on Dec. 31