Lexmark reports third quarter results

"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; the acquisition of Pallas Athena; and the introduction of our enterprise-focused, cloud-based, mobile Print Release solution.

"Our acquisition of Pallas Athena and investment in the BPM market demonstrates Lexmark’s continued focus on strategic acquisitions of technologies that strengthen our unique portfolio of leading end-to-end fleet management and business process solutions," added Rooke. "We expect this to be attractive to our global enterprise customers and help expand both our managed print services and Perceptive Software offerings."

For the third quarter of 2011, revenue of $1.035 billion grew 1 percent compared with the same quarter last year.

Third quarter 2011 earnings per share were unfavorably impacted by discrete tax items of $0.06 per share. Third quarter 2010 earnings per share were favorably impacted by discrete tax items of $0.04 per share.

GAAP earnings per share for the third quarter of 2011 were $0.86. Excluding $0.09 per share for restructuring-related and acquisition-related adjustments, earnings per share for the third quarter of 2011 would have been $0.95. GAAP earnings per share for the third quarter of 2010 were $0.90. Earnings per share for the third quarter of 2010 would have been $1.09 excluding $0.19 per share for restructuring-related and acquisition-related adjustments.

In the third quarter, Hardware revenue grew 2 percent, Supplies revenue was about flat, and Software and Other revenue grew 15 percent, or 5 percent excluding acquisition-related adjustments.

Imaging Solutions and Services (ISS) revenue of $1.012 billion grew 1 percent in the third quarter compared to the same period last year. Perceptive Software revenue in the third quarter of $23 million grew 57 percent, or 15 percent excluding acquisition-related adjustments.

In the fourth quarter of 2011, the company currently expects revenue to decline in the mid-single digit range year on year. GAAP earnings per share in the fourth quarter of 2011 are expected to be around $1.02 to $1.12, or $1.15 to $1.25 excluding $0.13 per share for restructuring-related and acquisition-related adjustments. GAAP earnings per share in the fourth quarter of 2010 were $1.10, or $1.29 excluding $0.19 per share for restructuring-related and acquisition-related adjustments. The company continues to expect its effective tax rate for 2011 will be 23 percent.