Lexmark announces third quarter Results19 Oct, 2004
Lexmark announces third quarter Results
Lexmark International, Inc. announced financial results for its third quarter ended Sept. 30, 2004. Third quarter revenue was $1.266 billion, an increase of 9 percent compared to $1.157 billion last year. Diluted net earnings per share for the quarter were $1.17 and include a non-recurring benefit of 15 cents per share from the resolution of income tax matters. Without this tax benefit, earnings per share would have been $1.02, an increase of 29 percent compared to a year ago.
“Lexmark continued to perform well with 9 percent overall revenue growth and 31 percent operating income growth,” said Paul J. Curlander, Lexmark chairman and chief executive officer. “This was driven by double-digit unit growth in both our business and consumer segments, despite encountering weaker market conditions than we had anticipated.”
Gross profit margin was 35.2 percent for the quarter versus 32.1 percent a year ago due to improved product margins. Operating expenses were $262 million compared with $231 million in the prior year. Operating income margin improved 2.5 points to 14.6 percent in the third quarter of 2004 versus last year. Diluted net earnings per share for the period were $1.17 compared to 79 cents a year earlier.
Net cash provided by operating activities was $205 million in the third quarter. Capital expenditures for the quarter were $56 million. Lexmark repurchased 850,000 shares of its common stock during the quarter for $73 million. The company’s remaining share repurchase authorization was approximately $40 million as of Sept. 30, 2004.
Nine-month financial results
Revenue for the nine months ended Sept. 30, 2004 was $3.770 billion, an increase of 11 percent versus $3.385 billion in the same period of 2003. Gross profit margin was 34.4 percent, up 1.7 points from the prior year. Operating income was $535 million versus $406 million a year earlier, an increase of 32 percent. Net earnings per share on a diluted basis for the period were $3.10. Excluding the non-recurring tax benefit, earnings per share would have been $2.95, up 29 percent compared to $2.29 per share recorded in the same period of 2003. Net cash provided by operating activities for the first nine months was $491 million.
“Looking forward to the fourth quarter, we believe the strength of our product lineup and supplies-driven business model will keep us well-positioned for continued growth,” Curlander said. “Nevertheless, we continue to be cautious due to uncertainty in the market and the potential for aggressive price competition. In the fourth quarter of 2004, we expect a year-over-year revenue growth rate of mid- to high-single digits and earnings per share of $1.05 to $1.15 including the effect of the tax benefits and the projected increase in marketing expenses. This compares to earnings per share of $1.05 in the same quarter a year ago.”