Lexmark International Third Quarter Earnings Sneak Peek

Lexmark International Inc (NYSE:LXK) will unveil its latest earnings on Tuesday, October 23, 2012. Lexmark International develops and manufactures printing and imaging products and solutions for offices and homes.

Lexmark International Inc Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 78 cents per share, a decline of 17.9% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 97 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 78 cents during the last month. For the year, analysts are projecting net income of $3.76 per share, a decline of 20.2% from last year.

Past Earnings Performance: Last quarter, the company fell short of estimates by 0 cents, coming in at profit of 89 cents per share against a mean estimate of net income of 90 cents. The company fell in line with expectations in the first quarter.

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A Look Back: In the second quarter, profit fell 61.3% to $39.2 million (55 cents a share) from $101.3 million ($1.27 a share) the year earlier, missing analyst expectations. Revenue fell 12% to $918.6 million from $1.04 billion.

Stock Price Performance: Between July 24, 2012 and October 17, 2012, the stock price rose $4.82 (28.7%), from $16.77 to $21.59. The stock price saw one of its best stretches over the last year between August 2, 2012 and August 10, 2012, when shares rose for seven straight days, increasing 16.2% (+$2.77) over that span. It saw one of its worst periods between May 9, 2012 and May 18, 2012 when shares fell for eight straight days, dropping 9.7% (-$2.82) over that span.

Wall St. Revenue Expectations: Analysts are projecting a decline of 11.5% in revenue from the year-earlier quarter to $911.6 million.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of three-straight quarters of revenue declines. Revenue fell 4% in the fourth quarter of the last fiscal year and 4.1% in first quarter before falling again in the second quarter.

The company is trying to stem some negative momentum heading into this earnings announcement. Profit has dropped by a year-over-year average of 29% over the past four quarters.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.42 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.85 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 27.5% to $1.37 billion while assets decreased 2.4% to $1.95 billion.

Analyst Ratings: With five analysts rating the stock a sell, none rating it as a buy and four rating it as a hold, there are indications of a bearish outlook.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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