Lexmark forecasts profit below estimates on weak demand
(Reuters) - Printer maker Lexmark International Inc (LXK.N) forecast a current-quarter profit below analysts' estimates as it expects lower revenue on weak demand from outside the United States as well as its exit from the inkjet printer business.
Shares of the company, which received more than half of its revenue from outside the United States last year, fell 14 percent to $24.05 on the New York Stock Exchange on Tuesday.
"On the imaging side, (demand) has been down the last couple of years, we expect more of the same," Lexmark Chief Executive Paul Rooke told Reuters.
"We think 2013 will probably be flat to down, it's little more pressed on that side," he said.
The company's imaging division includes its laser printers, software and managed print services business.
Most printer makers are struggling with falling sales as printing has been a target of corporate cost cutting and personal computing has moved to tablets and smartphones.
Larger rival Xerox Corp (XRX.N) is also shedding its printer company image as it focuses on its services business, which it entered with the 2009 acquisition of Affiliated Computer Services Inc for $5.5 billion.
Lexmark expects the impact from its exit of the inkjet printer business, announced in August, to continue into 2013 and beyond.
The company forecast first-quarter adjusted earnings of between 80 cents and 90 cents per share. It expects revenue to decline 11 percent to 13 percent from a year earlier, implying revenue of $864 million to $884 million.
Analysts on average are expecting earnings of $1.01 per share on revenue of $881 million, according to Thomson Reuters I/B/E/S.
The company, which acquired healthcare software maker Acuo Technologies for about $45 million earlier this month, said it is looking at "candidates that make good strategic fit" as it shifts to higher value printing services and software products.
"2012 was an important year for us with four software acquisitions plus the launch of a whole new laser line and the exit of our inkjet business," Rooke said.
Lexmark's net income fell to $6.3 million, or 10 cents per share, in the fourth quarter from $69.3 million, or 94 cents per share, a year earlier.
Excluding items, the company earned 86 cents per share, according to Thomson Reuters I/B/E/S.
Revenue fell to $967.4 million from $1.06 billion a year earlier.
Analysts on average had expected earnings of 90 cents per share on revenue of $934 million.
Fourth-quarter earnings per share were impacted 25 cents, or $17 million, from higher taxes.
The company said it received more business in the quarter from places where taxes were higher.
Lexmark said in October that fourth-quarter margins would be hit by the sale of the remaining inkjet hardware and a reduction in laser supplies inventory.
(Reporting by Neha Alawadhi and Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila)