Lexmark 2Q2013 Profit Doubled As Laser Supplies Grew

Lexmark released its 2nd quarter financial report on July 23rd. Revenue for the 2Q2013 (ended on June 30) was $890 million, down 3% year-over-year. The quarterly profit is $88.9 million (€67.2 million), compared to $39.2 million (€29.6 million) a year earlier.

Imaging Solutions and Services (ISS) reported $798 million revenue, down 5% compared to the same period in 2012. Managed Print Services (MPS) revenue continued its growing momentum, with a 12% growth rate. Perceptive Software revenue grew by 34%.

Inkjet Exit revenue, which took up 7% of total company revenue, decreased 38%. Paul A. Rooke, Chairman, CEO and Chairman of the Executive Committee, said, “We’ve been divesting our Inkjet business, including the exit of our consumer inkjet business starting late 2007 and then business Inkjet last year. We closed the previously announced sale of our inkjet-related technology and assets to the Funai Electric Company in the second quarter for $100 million. These actions have all been taken with the end in mind of becoming a world-class end-to-end solutions provider. ”

Revenue for large workgroup hardware, representing about 80% of total hardware revenue, was down 9% compared to the same period in 2012. Unit shipments, however, witnessed double-digit growth, owing to the strong growth in color and in European sales.

John W. Gamble, Chief Financial Officer, Principal Accounting Officer and Executive Vice President, said, “We had very strong unit growth in EMEA. However, pricing remains extremely aggressive in the EMEA, causing a negative geographic mix impact on overall average unit revenue (AUR). Product mix was negative as we saw a higher relative percentage of devices in the lower end of large workgroup, driven by some large government transactions, again, primarily in EMEA.”

According to Lexmark, small workgroup laser hardware revenue declined 11%, driven by a 16% decline in units. Weaker government sales are blamed for the decline, as is currency fluctuation.

Laser supplies enjoyed 5% growth in the 2Q2013, because MPS contracts helped to increase output. Mr. Gamble added, “Laser supplies channel inventories grew somewhat in the quarter versus our expectation of flat. We believe relative year-to-year channel improvements were more than half of the increases in laser supplies’ revenue in the quarter. As we look forward, we again expect supplies channel inventory to remain relatively flat in 3Q2013.”

Lexmark is proud to be recognized as a leader in Smart MFPs. It has recently been chosen as the exclusive output provider for the FBI.

Looking ahead, Lexmark expects the Inkjet Exit will continue to be a headwind. It expects the sector will be less than $100 million by 2015.