Lexmark Reports 9% Increase in Laser Supplies Revenue

Lexmark International, Inc. (Lexmark) has released its first-quarter financial report on April 22. Total Revenue for the quarter was $877.7 million, down less than 1% compared with the same period last year. Net earnings decreased to $29.3 million from the previous year’s $40 million, down 27%.

If excluded the Inkjet Exit, Lexmark’s revenue increased 6% year over year (YOY), driven by Perceptive Software and management services, which have seen 38% and 12% growth in revenue, respectively.

Imaging Solutions and Services (ISS), which includes Laser and Inkjet Exit, reported $817 million in revenue, having declined 3% YOY. Revenue for the Laser segment was $744 million, with 4% YOY growth, while that for inkjet was $73 million, down 40% compared with the same period last year. Other highlights include:

• MPS revenue of $180 million grew 12%.
• Non-MPS revenue4 of $565 million grew 1%.
• Perceptive Software revenue was $61 million. Perceptive Software revenue, excluding acquisition-related adjustments of $3 million, was $64 million and grew 38% compared to the same period in 2013.

During 1Q2014, Lexmark’s hardware revenue declined 8% YOY, but “Laser hardware units grew year-to-year with large workgroup units up 3%”. Lexmark believes “the continued growth in large workgroup reflects its continued success in MPS and strengthens our future supplies.” Small workgroup units, on the other hand, declined slightly.

Supplies revenue declined 1% with laser supplies revenue increasing 9% YOY. Lexmark believes the growth “partially reflects channel purchases ahead of legacy laser supplies price increases in North America that took effect in early April.“
According to Paul Rooke, Lexmark’s Chairman and CEO, “We believe that almost a third of the 9% year-to-year growth in laser supplies revenue was due to net growth in laser supplies channel inventory. We continue to see strong end-user demand for the laser supplies as is evidenced by the recent strong laser supplies revenue growth rate. This reflects continued good performance in MPS and large workgroup hardware. All geographies experienced year-to-year laser supplies growth in the quarter. For perspective, laser supplies revenue in 1Q2013 was relatively weak and therefore 1Q2014 growth was versus a relatively easy compare.”

For geographic performance, Rooke added, “we saw growth in U.S. and strong growth in Asia. Excluding Inkjet Exit, the U.S. grew 10%, EMEA declined less than 1% and other geographies grew 9%. Perceptive Software saw growth in EMEA driven by earlier investments in sales or marketing and the recent acquisition of Saperion.”

(Image Source:Lexmark)

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