High expenses and operating losses lead CEO Paul Rooke to pledge profitability for 2013.
Despite seeing rapid growth of 88
percent in the last quarter, Lexmark’s software division has performed below expectations, leading executives to target profitability in 2013, reports the Lexington Herald.
Paul Rooke, Lexmark CEO
The OEM has acquired a substantial number of software companies that now make up the flagging division, helmed by Perceptive Software. Lexmark has dedicated much resources and effort to spur growth, leading to high expenses and operating costs amounting to a loss of $8 million (€6.1 million).
Lexmark CEO Paul Rooke commented: “We’re going to limit the expenses here for a while, while we let the organisation mature and catch up to its rapid growth then deliver profit in 2013 […] we had a few deals that didn’t close. We think they’ll close in the fourth or first quarter [2013].”
Shannon Cross, Cross Research, noted: “[Software is] one of the few areas of their business that’s growing, so you don’t necessarily want to starve it. They’ll have to have a careful balancing act.”
Lexmark announced in August 2012 that it would be selling its inkjet business, revealing that it would be focusing “on higher value imaging and software solutions, and we believe the synergies between imaging and the emerging software elements of our business will continue to drive growth across the organisation”.
However Gartner analyst Federico De Silva has commented that the OEM’s inkjet exit is indicative of the state of the industry as a number of prominent OEMs begin to shift attention to software.