* EPS $1.29 per share vs. Street view $1.12
* Sees revenue growth of 1 pct in Q1
* Shares rise 10 pct
(Adds executive, analyst comments)
NEW YORK, Feb 1 (Reuters) - Lexmark International Inc's (LXK.N) fourth-quarter profit trounced Wall Street expectations helped by strong sales of laser printers and it issued an upbeat earnings forecast, sending shares up 10 percent on Tuesday.
The company's laser printer sales rose 11 percent in a sector that's been steadily declining in the last few years as customers move to digital content, indicating that Lexmark may be gaining market share from such rivals as Xerox Corp (XRX.N), Canon and Hewlett-Packard Co (HPQ.N).
"Every part of their business is doing fairly well," said Henry W. Schacht of Schacht Value Investors, who manages funds that hold Lexmark shares.
Schacht added that he was impressed that the company, which has a market cap of $2.74 billion, generated more than $500 million in cash in the past year.
The company expects first-quarter earnings to be $1.18 to $1.28 per share, excluding items for restructuring and acquisition costs, compared with the range of 96 cents to $1.26 that analysts had forecast.
Excluding 19 cents per share for restructuring and acquisition-related adjustments, earnings per share were $1.29. This surpassed analysts' average estimates of $1.12 per share, according to Thomson-Reuters I/B/E/S.
"The main driver was that Lexmark beat on the bottom line and they reiterated relatively bullish guidance," said Cross Research analyst Shannon Cross.
In the third quarter, shares fell more than 20 percent after disappointing results.
The company posted a quarterly profit of $87.6 million, or $1.10 per share, compared with a profit of $59.8 million, or 76 cents per share a year earlier.
Printer companies like Lexmark make money by selling supplies like ink and toner after clients have bought printers. Lexmark thrived in this area during the fourth-quarter, Chief Executive Paul Rooke said in an interview.
Revenue rose nearly 3 percent to $1.10 billion from $1.07 billion a year earlier. This narrowly missed analysts' average estimates of $1.104 billion in the quarter, according to Thomson-Reuters I/B/E/S.
The company expects first-quarter revenue to rise 1 percent, in line with Wall Street estimates.
Lexmark expects 2011 revenue to rise in the low-single-digit percentage range, compared with the 9 percent growth it posted in 2010. Susquehanna Financial Group analyst Jeffrey Fidacaro said that slowing growth will be a concern to investors.
Shares were up 10 percent at $38.26 on the New York Stock Exchange. (Reporting by Liana B. Baker; Editing by Derek Caney)