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Lexmark Sees Negative Impact From Inkjet Exit Strategy

Toner News Mobile › Forums › Latest Industry News › Lexmark Sees Negative Impact From Inkjet Exit Strategy

Tonernews.com, January 31, 2013. USA
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    Recharger Magazine :Lexmark Sees Negative Impact From Inkjet Exit Strategy

    LEXINGTON, Ky. – Lexmark International, Inc. announced financial results for the fourth quarter and full year of 2012. For the quarter, total revenue of $967 million declined 9 percent compared to $1.060 billion last year. Imaging Solutions and Services (ISS) revenue of $925 million declined 10 percent compared to the same period last year. Within ISS, managed print services revenue grew 3 percent to $170 million; however, non-MPS revenue declined 9 percent to $608 million. Inkjet Exit revenue of $147 million declined 26 percent year to year. Inkjet Exit revenue represented 15 percent of total company revenue and is expected to decline as a percentage of total revenue with the company’s decision to exit its remaining inkjet hardware for improved profitability.

    Hardware revenue of $222 million and Supplies revenue of $656 million declined 15 percent and 10 percent, respectively. Software and Other revenue of $89 million grew 27 percent, or 25 percent excluding acquisition-related adjustments.

    Perceptive Software revenue was $42 million. Perceptive Software revenue, excluding acquisition-related adjustments of $1 million, was $43 million and grew 37 percent compared to the same period in 2011.

    Lexmark continues to focus on growing workgroup laser hardware and supplies, MPS, and software revenue as inkjet continues to become a less significant portion of the company’s revenue mix.

    "Our fourth quarter financial results were highlighted by revenue that exceeded expectation, solid cash flow generation and ongoing growth in Perceptive Software and managed print services revenue," said Paul Rooke, Lexmark chairman and chief executive officer.

    "In 2012 we strengthened our solutions portfolio through four software company acquisitions, and launched one of Lexmark’s most significant laser line advancements with solutions-enabled devices that extend our smart MFP and managed print services leadership.

    "We are expecting to deliver savings of $85 million in 2013 from the actions announced last August, and we are well positioned to generate positive free cash flow as we have for each of the past 11 years," Rooke added. "We continue to execute on our capital allocation strategy of rewarding shareholders through share repurchases and dividends while pursuing acquisitions that further expand and strengthen our solutions offerings."

    Perceptive Software revenue was $42 million. Perceptive Software revenue, excluding acquisition-related adjustments of $1 million, was $43 million and grew 37 percent compared to the same period in 2011.

    For the full year, total revenue of $3.798 billion declined 9 percent compared to $4.173 billion for fiscal 2011. ISS revenue of $3.642 billion declined 11 percent compared to the same period last year. Within ISS, MPS revenue of $624 million grew 7 percent, non-MPS revenue of $2.377 billion declined 9 percent and Inkjet Exit revenue of $640 million declined 27 percent year to year.

    Hardware revenue of $827 million and Supplies revenue of $2.640 billion declined 17 percent and 9 percent, respectively. Software and Other revenue of $337 million grew 22 percent, including and excluding acquisition-related adjustments.

    Perceptive Software revenue was $156 million. Perceptive Software revenue, excluding acquisition-related adjustments of $5.5 million, was $162 million and grew 62 percent compared to the full year of 2011.

    In the first quarter of 2013, the company expects a continued negative impact from the decision to exit inkjet. Revenue is currently expected to decline 11 to 13 percent year on year. GAAP earnings per share in the first quarter of 2013 are expected to be around $0.43 to $0.53, compared with GAAP earnings per share of $0.84 in the first quarter of 2012. Non-GAAP earnings per share in the first quarter of 2013 are expected to be around $0.80 to $0.90, compared with non-GAAP earnings per share of $1.05 in the first quarter of 2012.

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    January 31, 2013 at 8:10 AM
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