Lexmark International Inc. Earnings Cheat Sheet: Booking a Profit Again

S&P 500 (NYSE:SPY) component Lexmark International Inc. (NYSE:LXK) reported its results for the third quarter. Lexmark International develops and manufactures printing and imaging products and solutions for offices and homes.

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Lexmark International Earnings Cheat Sheet for the Third Quarter

Results: Net income for the computer based systems company fell to $67 million (86 cents per share) vs. $72 million (90 cents per share) a year earlier. This is a decline of 6.9% from the year earlier quarter.

Revenue: Rose 1.5% to $1.03 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: LXK reported adjusted net income of 95 cents per share. By that measure, the company fell short of mean estimate of $1.02 per share. It beat the average revenue estimate of $1 billion.

Quoting Management: “Our revenue growth for the quarter was once again stronger than expected, highlighted by core growth of 10 percent year on year driven by a double digit increase in high end hardware, supplies and managed print services,” said Paul Rooke, Lexmark chairman and chief executive officer. “Lexmark remains committed to driving value for our shareholders, demonstrated by our recent actions including the repurchase of $125 million of Lexmark stock in the third quarter and the planned repurchase of another $125 million in fourth quarter.”

Key Stats:

The company fell short of estimates last quarter after beating the mark the quarter before with net income of $1.36 versus a mean estimate of net income of $1.02 per share.

Net income has increased more than twofold year over year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed more than sevenfold from the year earlier quarter.

The company’s revenue has now risen for two straight quarters. In the second quarter, revenue increased 1.1% to $1.04 billion from the year earlier quarter.

Gross margins grew 1.5 percentage points to 36.9%. The growth seemed to be driven by increased revenue, as the figure rose 1.5% from the year earlier quarter while costs fell 0.8%.

Looking Forward: For the next quarter, analysts are growing pessimistic about the company’s expected results. The average estimate for the fourth quarter is $1.12 per share, dropping from $1.18 a month ago. The average estimate for the fiscal year is $4.65 per share, a rise from $4.26 ninety days ago.

Competitors to Watch: Canon Inc. (NYSE:CAJ), Hewlett-Packard Company (NYSE:HPQ), Xerox Corporation (NYSE:XRX), Dell Inc. (NASDAQ:DELL), Synaptics, Incorporated (NASDAQ:SYNA), Immersion Corporation (NASDAQ:IMMR), Hauppauge Digital, Inc. (NASDAQ:HAUP), EMC Corporation (NYSE:EMC), Ricoh Company Ltd. (RICOY), and Logitech Intl. SA (NASDAQ:LOGI).

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(Source: Xignite Financials)