Lexmark is no longer in the inkjet business
OEM’s forecasts below those of analysts as demand for printers and printing services declines.
Lexmark International Inc. has announced second quarter adjusted earnings of 80 to 90 cents per share on revenue of $845.1 million (€649 million) to $863.4 million (€663.4 million) – lower than previous average estimates by analysts of 89 cents per share on revenue of $846.3 million (€650.3 million), reports Reuters.
Falling printer sales due to corporate cost cutting and the increasing popularity of mobile devices has been identified as a main cause for the low forecast; although Lexmark’s first quarter revenue reportedly exceeded expectations.
The OEM’s imaging division, including its laser printers, software and MPS business, fell to 13 percent to $840 million (€645.4 million), despite the division accounting for 96 percent of Lexmark’s overall revenue during 2012; while first quarter net income fell to $34.8 million (€26.7 million) or 54 cents per share compared to $61 million (€46.8 million) or 84 cents per share in the first quarter of 2012.
Lexmark reported first quarter earnings for 2013 at 88 cents per share, with revenue falling to $884.3 million (€679.5 million). Despite the fall, the results exceeded average analyst expectations of 87 cents per share and a revenue of $873.6 million (€671.3 million).
Kulbinder Garcha, an analyst with Credit Suisse, commented on Lexmark’s future as it shifts to higher value printing services and software products following its exit from the inkjet printer business last August: “While the company continues to ramp up its software and services offering, there will be a large, profitable void to fill as they exit the inkjet segment of the printing market over the next few years.”