Lexmark Releases Q4/FY14 Financial Report

Lexmark has released its fourth quarter and full year financial report for 2014 fiscal year.

In the 4th quarter, revenue was $1.032 billion, achieving 2% year to year  (YTY) growth exceeding October guidance with Laser and Perceptive Software growth more than offsetting a combined Inkjet Exit and currency headwind of about 8%. Excluding Inkjet Exit, revenue grew for the seventh consecutive quarter, delivering 7% growth YTY.

Lexmark’s 2014 revenue totaled $3.728 billion, up 1% YTY. Operating income reached US$397 million, decreases by 6% YTY. Net earnings decreases 13% YTY with US$255 million.

Paul Rooke, Chairman and Chief Executive Officer of Lexmark, described the fourth quarter outcome as “a strong quarter operationally for Lexmark”. And he was pleased with the outcome, “Overall, we were pleased that the solid revenue growth from our high value areas more than offset the stiff headwinds of the planned ongoing decline from the Inkjet Exit and unfavorable currency.”

According to Lexmark’s press release, here are the fourth quarter financial results for different segments:

• Imaging Solutions and Services (ISS) revenue of $933 million declined less than 1%year to year. ISS revenue, excluding Inkjet Exit revenue, grew 4%year to year.
• Within ISS, revenues from MPS revenue of $242 million grew 16%year to year.Non-MPS revenue of $633 million was about flat year to year. Inkjet Exit revenue of $58 million declined 42%year to year.
• Perceptive Software revenue was $90 million. Excluding acquisition-related adjustments, Perceptive Software revenue grew 37%year to year.

According to Seeking Alpha, David Reeder, VP and CFO of Lexmark, has shared details report on the quarterly performance of ISS segment, “Hardware revenue grew 3% in the quarter. Large workgroup hardware revenue grew 5% driven by 15% unit growth partially offset by a 9% decline in average unit revenue largely driven by currency.”

He said ISS achieved record levels of large workgroup laser units with growth in all product categories, adding, “Large workgroup color unit growth was especially strong at 30%. Small workgroup experienced strong unit growth of 11%, but revenue declined slightly year-to-year primarily due to the negative impact of currency. ”

“Laser Supplies revenue grew 5% year-to-year and Lexmark continue to see a good end user demand for laser supplies highlighting the continued growth in the quality of MPS and large workgroup installed base. Fourth quarter estimated laser supplies channel inventory was roughly as expected and the relative year-to-year channel movement minimally impacted supplies revenue growth. The 42% decline in Inkjet Exit supplies revenue was largely in line with our expectations.”

“Geographically, Lexmark delivered fourth quarter revenue growth of 6% in the United States, 2% in EMEA and negative 6% in rest of the world. Excluding the Inkjet Exit and currency impacts, United States revenue growth was 12%, EMEA 16% and rest of world 3%.”

In the first quarter of 2015, Reeder expected “first quarter revenue to be down 3% to 5% YTY. This estimate is unfavorably impacted by approximately 8% of headwind from currency and the Inkjet Exit. Our outlook includes a decline in Inkjet Exit revenue of approximately 40% year-to-year. Laser plus Perceptive Software revenue is expected to decline slightly year-to-year due to 5% currency headwinds.”

Reeder also pictured a future map for the full fiscal year 2015: “We expect full year revenue to be down 3% to 5% which includes Laser plus Perceptive Software revenue growth more than offset by 6% impact from currency in the ongoing Inkjet Exit.”

Source: seekingalpha

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