WASHINGTON (dpa-AFX) - Printing and content management solutions provider Lexmark International Inc. (LXK), Tuesday reported lower fourth-quarter earnings, largely on a four percent drop in revenues and one-time charges. Nonetheless, excluding items, adjusted earnings topped Street expectations, while sales came in line with estimates. The company has also forecast weak earnings outlook for the first quarter that is expected to miss analysts' estimates, dragging its shares down 6 percent in afternoon trade. Lexmark also revealed actions to funnel funds to more productive business and revealed charges towards this end, expecting cash savings starting 2012. Lexmark's net income in the fourth quarter dropped to $69 million or $0.94 per share from $88 million or $1.10 per share last year. Results for the quarter include one-time restructuring and acquisition charges of $0.32 per share. Excluding items, adjusted earnings for the quarter was $93 million or $1.24 per share, compared to $103 million or $1.29 per share in the prior year. On average, 12 analysts polled by Thomson Reuters expected earnings of $1.16 per share for the quarter. Analysts' estimates typically exclude special items. The Lexington, Kentucky-based company's revenue declined to $1.06 billion from $1.104 billion last year. Ten analysts on consensus expected revenues of $1.06 billion for the quarter. Hardware revenue slid 9 percent and Supplies revenue declined 3 percent. Software and Other revenue increased 5 percent. Gross margin for the quarter improved to 37.4 percent from 35.6 percent a year ago, but was offset by increased selling and research expenses. For the first quarter, Lexmark expects earnings in the range of $0.76 to $0.86 per share, and adjusted earnings of $0.98 to $1.08 per share. Street analysts currently expect earnings of $1.13 per share for the first quarter. Lexmark's restructuring actions entails pre-tax charges of about $35 million, with about $8 million incurred in the fourth quarter 2011. Theses actions are to generate cash savings of about $15 million in 2012 and ongoing cash savings of $28 million starting 2013 when the actions are to complete. Lexmark also plans to return more than 50 percent of free cash flow to its shareholders through dividends and share repurchases. LXK is currently trading at $34.22, down $0.59 or 1.69%, on a volume of 3.76 million shares on the Nasdaq.
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