Lexmark Quarter Beats Expectations on Strong Laser Printer Sales

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)