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IKON IN THE NEWS IKON PROFIT FALLS AS MARGINS NARROW Source: Reuters
Ikon Office Solutions Inc., Which Sells and leases copiers and office equipment, on Monday said its fiscal fourth-quarter profit fell on declining profit margins on its copiers and printers.
The company also said it expects a decline in profit on flat revenue for the current quarter.
The Valley Forge, Pennsylvania, company said net income was $32.4 million, or 21 cents a share in the fourth quarter, compared with $39.3 million, or 25 cents per share.
Excluding a $7 million gain from early debt repayment, the company posted a profit of 18 cents a share.
Revenue at Ikon, which offers office equipment made by manufacturers such as Canon Inc. and Ricoh Co. Ltd, fell to $1.20 billion from $1.21 billion a year ago.
Analysts on average had forecast a profit of 16 cents a share and revenue of $1.11 billion, according to Reuters Research, a unit of Reuters Group Plc. The company’s gross profit margin fell to 29.2 percent from 32.5 percent a year ago.
“That margin pressure essentially offset the improved profitability we should have delivered (from) stronger core revenues,” Ikon Chairman and Chief Executive Matthew Espe said on a conference call with analysts.
Net sales of equipment, which represents half of the company’s total sales, fell nearly 1 percent, reflecting a technology hardware business. Services revenue fell 2.8 percent.
For the full fiscal year ending in September, Ikon’s net income fell to $116 million from $150.3 million, while total revenue slipped to $4.7 million from $4.9 million.
The company said it expects its first-quarter earnings, ending in December, to be in a range of 17 cents to 19 cents a share, compared with 21 cents a year ago. It projected flat revenue.
It expects fiscal 2004 earnings, ending in September, to be in the range of 82 cents to 87 cents a share, compared with 75 cents a share in 2003. It projected a 1 percent increase in revenue.
Analysts projected Ikon’s first quarter profit at 18 cents a share, and 88 cents a share for the full year.
Last year, the company exited its telephony business, sold its technology education business and closed or sold several digital print centers and technology services locations.
Shares of Ikon edged up 2 cents to $8.10 on the New York Stock Exchange. Ikon shares are up 20 percent from July, when the company warned of weakness in its fiscal fourth quarter.
IKON OFFICE SOLUTIONS 4th-Quarter NET FELL 17.5%
Ikon Office Solutions Inc.’s fiscal fourth-quarter net income declined 17.5% due to Ikon Office Solutions Inc.’s fiscal fourth-quarter net income declined 17.5% due to declines in its gross profit margin from a year ago. However, the distributor of copiers, printers and fax machines expects fiscal 2004 results to improve over fiscal 2003, as it carries over sales momentum from the latest quarter. face=Arial color=#0000ff Dow Jones Report with Figures
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