Boston, MA 04/22/2014 (wallstreetpr) – Lexmark International Inc (NYSE:LXK), the company engaged in the development, manufacturing and supply of printer, image devices and its services, posted its first quarter adjusted earnings today that came above par of what the analysts had projected. However, the shares of the company opened weak during the early trade due to the substantial fall in its profits in the reported quarter.
Beats Analysts Buts Profit Falls
In the first quarter ended on March 31, the company recorded adjusted earnings of $0.92 per share. The earnings came in higher than the set expectation of $0.87 by the analysts. Combined revenue from managed print services and perceptive software grew 18% to $244 million, which excludes takeover-related adjustments of $3 million. The total revenue for the quarter came in at $877.7 million, which beat the analysts’ estimates of $855.8 million, but slipped 0.8% year-over-year. However, the company’s overall profit dropped 27% on account of weaker revenue from its product segment coupled with higher operating expenses. The company’s profit stood at $29.3 million; that is $0.46 per share, as compared to $40 million or $0.62 per share in 2013.
Lexmark International Inc (NYSE:LXK), like its other counterparts in the technology industry, has exhausted years battling with an overly mature hardware market, confronting margin pressures and growth issues from developed nations. But, on the contrary to its peers, Lexmark continued to focus on its core business and enhanced with software upgradations. The strategy adopted is different from its competitors like Xerox Corp (XRX) that spread its business across various segments and new offerings, as outsourcing.
Second Quarter Forecasts
For the current three months, that is the second quarter, Lexmark International Inc (NYSE:LXK) project an adjusted profit to come in the range of $0.85 to $0.95 on a revenue decline of between 2-4%. The projected numbers compare to the analysts’ estimate of $0.94 per share of profits on a 4% revenue decline. The company mentioned during the conference call that its decision to shut down consumer and business inkjet supplies and hardware business will continue to impact it negatively. However, the company assured that it is well positioned in the growth markets and will be able to drive its margins in the current year. It said that the supply performance is expected to appear better in the next quarter.
