Weaker product revenue and higher operating expenses attributed to first quarter decline.
Market Watch reported on Lexmark’s 27 percent fall in profit during the first quarter of 2014 (1Q2014), with the OEM reporting a profit of $29.3 million (€21.2 million), or 46 cents per share, compared to a profit of $40 million (€29 million), or 62 cents per share, a year earlier.
Lexmark has attributed the decline to weaker product revenue as well as higher operating expenses, with the company “wrestling with a maturing hardware market” and “facing squeezed margins and weaker growth from developed countries” over recent years. However, the article notes that, unlike some OEMs, Lexmark has “worked to stick to its core business and add software around it” rather than diversifying further afield.
Per-share earnings reportedly declined to 92 cents from 95 cents, while revenue fell by 0.8 percent to $877.7 million (€634 million). This differed to the prediction of analysts that earnings would fall to 87 cents per share on $856 million (€618.4 million) in revenue.
Looking ahead to the second quarter of the year, the company has forecasted an adjusted profit of 85 cents to 95 cents per share on a revenue decline of between two and four percent, compared with analyst estimates of 94 cents per share and a revenue decline of four percent.
Lexmark reportedly stated that it expects a “continued negative impact” following its decision to exit its consumer and business inkjet hardware and supplies business in 2012.