Lexington, KY - Bolstered in part by a delayed tax credit that dragged down Lexmark’s fourth quarter earnings, the Lexington-based solutions company reported results on the high end of company expectations.
“It was a solid and busy first quarter for us. We saw several positive signs as we continued our shift... from a hardware-centric to a software-centric company. The positive that we saw, our revenue and earnings per share ended up a the high end of our external guidance range. We also saw continued growth in these strategic segments, managed print services is up 10 percent, Perceptive Software is up 54 percent," Lexmark Chairman and CEO Paul Rooke said an interview with Business Lexington.
The company earned 54 cents per share, compared to 84 cents a share during the same period last year.
The company saw a nine-cent bump as a result of the inaction of the American Taxpayer Relief Act of 2012, which was not passed by Congress until after the first of the year. As a result, revenue that would have been received during the fourth quarter of 2012 was delayed until this earnings period.
Lexmark’s revenue was $884 million compared to $992 million last year, while gross profit came in at 37.8 percent compared to 38.4 percent in Q1 of 2012.
In the second quarter of the year, the company expects a continued negative impact from the decision to exit the inkjet market. Revenue is currently expected to decline 6 to 8 percent year on year. Earnings per share in the second quarter of 2013 are expected to be around $0.42 to $0.52, compared with earnings per share of $0.55 in the second quarter of 2012. Second quarter 2013 guidance excludes expected gains from the closing of the inkjet sale transaction, which is scheduled to close in the second quarter of 2013, according to a company release.
“We’ll have improved profitability in the second half of the year as we get the full benefit of the cost and expense restructuring, as well as further improvements in our software business,” Rooke added.