* Expects 2013 revenue decline of 5-6 pct vs 6-7 pct
* Third-quarter adjusted earnings $0.95/share vs est $0.91
* Company wins new orders for imaging software, services
* Shares rise as much as 11 pct
By Sruthi Ramakrishnan
Oct 22 Printer maker Lexmark International Inc
reported better-than-expected quarterly earnings after
winning new orders for its imaging software and services,
sending shares in the company up as much as 11 percent.
Lexmark, which stopped making inkjet printers last year to
focus on more lucrative software and services, also said its
full-year revenue would fall by less than previously forecast.
Chief Executive Paul Rooke said on a post-earnings
conference call that Lexmark had won 25 software deals this year
from customers in the banking, retail, manufacturing, government
and healthcare sectors.
Revenue from the company's Perceptive business, which makes
software to scan everything from spreadsheets to medical images,
rose 32 percent in the third quarter.
Revenue from managed print services (MPS), which allow
companies to outsource their printing needs to a service
provider, rose 18 percent in the quarter to Sept. 30.
"MPS and Perceptive software, where we've been projecting
about 15 percent growth combined ... are going to be a little
more as we finish up the fourth quarter," Rooke told Reuters in
The two units combined account for slightly more than a
quarter of the company's total revenue. Laser printers account
for the majority of its sales.
Lexmark said it expected full-year revenue to decline by 5
percent to 6 percent, the second time since July that it has
reined in the forecast due to big contract wins in software and
services. Previously, it had forecast a decline of 6-7 percent.
Rooke said the recent acquisitions of software firms
Saperion and PACSGEAR would contribute full-year revenue.
In the third quarter, the Lexington, Kentucky-based company
posted a net profit of $28.5 million compared with a break-even
quarter a year earlier.
However, Lexmark reduced its full-year adjusted earnings
forecast to between $3.85 and $3.95 per share from $3.90 to
$4.10 per share, citing a higher-than-expected tax rate - the
result of a higher proportion of U.S. sales in the total.
"Our international earnings are taxed at a lower rate than
our U.S. domestic earnings," said Rooke. "So when you have a
shift in that mix - a little less international earnings, and
more U.S. - that effective tax rate goes up."
Printer sales in the United States - particularly large work
group units, which include laser printers that can print, copy,
fax and scan to a network - have also been hit by a slowdown in
federal government purchases.
"It wasn't the shutdown," said Rooke. "It is more the
sequester that is impacting."
Excluding items, the company earned 95 cents per share in
the third quarter. Revenue dropped 3 percent to $890.5 million.
Analysts on average had expected earnings of 91 cents per
share on revenue of $872.2 million.
Lexmark's shares were up 6.4 percent at $38.09 in afternoon
trading on the New York Stock Exchange on Tuesday.