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Lexington, KY – Following the shuttering of its Inkjet printing division, Lexmark’s earnings for the third quarter fell to none from $.86 a share during the same time last year.
Had it not been for costs related to restructuring and previous acquisitions, the company reports it would have made $.94 a share, down a penny from the same time last year when discounting acquisition and restructuring costs.
Seventy-five cents a share was lost to restructuring cost, “the majority of it,” going toward the company’s decision to exit the inkjet division according to Lexmark Chairman and CEO Paul Rooke.
“We had a very strong cash flow quarter, $95 million, so this is not a cash flow kind of issue,” Rooke told Business Lexington Tuesday morning. “Our business is quite healthy. The restructuring, this is a one-time thing that we made a decision to divest of a piece of our business as we move from a hardware centric company to a solutions company.
“The board is fully in agreement with our strategy and the actions we’re taking to divest of certain things like the inkjet as well as invest in other things like the five software companies we’ve acquired over the last couple of years,” he added.
The Lexington-based company saw revenue of $919.2 million this quarter compared to $1,034,900,000 in the same time last year with a gross profit of $328.4 million this year over $381.7 last year.
“As we look at the quarter we’re still facing a number of headwinds in currency, weakness in Europe, just the natural decline from our decision to exit inkjet,” Rooke said. “Despite that… we thought our performance was relatively strong.”
In late August Lexmark exited the consumer aimed inkjet printer business taking 1,700 jobs worldwide with it, including approximately 550 of them. Of that Lexington based group, 350 were full-time employees who were offered severance packages in the process. The other 200 were contract employees.
For the fourth quarter of the year, Lexmark expects to see earnings per share of $.17 to $.27 compared to $.94 a share in the final quarter of 2011. The company is anticipating another quarter of earnings laden with restructuring costs as $.47 per share is expected to go towards that effort.
The company also launched a new line of laser printers last week that include smart software to allow them to interact with the company’s solutions based business model. As those products continue to roll out and hit shelves, Rooke said he expects to see more growth in the company.