Lexmark Quarter Beats Expectations on Strong Laser Printer SalesBy Reuters | Print
Desktop-as-a-Service Designed for Any Cloud ? Nutanix Frame
Printer vendor Lexmark International beat expectations with a strong fourth quarter, boosted by strength in laser printer sales. The results indicated that Lexmark may be gaining market share from rivals such as Xerox and HP.
NEW YORK, Feb 1 (Reuters) - Lexmark International Inc's (NYSE:LXK) fourth-quarter profit trounced Wall Street expectations helped by strong sales of laser printers, sending shares up more than 6.5 percent in premarket trading on Tuesday.
The company's laser printer sales rose 11 percent in a sector that's been steadily declining in the last few years as customers move to digital content, indicating that Lexmark may be gaining market share from such rivals as Xerox Corp (NYSE:XRX), Canon and Hewlett-Packard Co (NYSE:HPQ).
Excluding 19 cents per share for restructuring and acquisition-related adjustments, earnings per share were $1.29. This surpassed analysts' average estimates of $1.12 per share, according to Thomson-Reuters I/B/E/S.
"Every part of their business is doing fairly well," said Henry W. Schacht of Schacht Value Investors, who manages funds that hold Lexmark shares.
Schacht added that he was impressed that the company, which has a market cap of $2.74 billion, generated more than $500 million in cash in the past year.
The company posted a quarterly profit of $87.6 million, or $1.10 per share, compared with a profit of $59.8 million, or 76 cents per share a year earlier.
Revenue rose nearly 3 percent to $1.10 billion from $1.07 billion a year earlier. This narrowly missed analysts' average estimates of $1.104 billion in the quarter, according to Thomson-Reuters I/B/E/S.
Lexmark expects first-quarter earnings to be $1.18 to $1.28 per share, excluding items for restructuring and acquisition costs, compared with the range of 96 cents to $1.26 that analysts had forecast.
The company expects first-quarter revenue to rise 1 percent, in line with Wall Street estimates.
Lexmark expects 2011 revenue to rise in the low-single-digit percentage range, compared with the 9 percent growth it posted in 2010. Susquehanna Financial Group analyst Jeffrey Fidacaro said that slowing growth will be a concern to investors.
Shares were trading were up 6.5 percent at $37.25 in premarket trading. (Reporting by Liana B. Baker; Editing by Derek Caney)