Lexmark Reports 16 Percent EPS Growth for Second Quarter
Press release from the issuing company
LEXINGTON, Ky., July 21 -- Lexmark International, Inc. today announced record revenue and earnings per share for the second quarter of 2003. Revenue grew 6 percent to $1.120 billion compared to a year ago and earnings per share of 77 cents grew 16 percent from 67 cents a year earlier.
"Once again our supplies annuity has added stability to our financial results," stated Paul J. Curlander, chairman and CEO. "We are pleased to deliver second-quarter results that reflect growth in revenue, operating income and earnings per share."
Laser and inkjet supplies account for 56 percent of total revenue
Lexmark's revenue for the second quarter ended June 30 was $1.120 billion, an increase of 6 percent versus $1.058 billion in the same period of 2002. Laser and inkjet supplies revenue was $630 million, an 11 percent increase over $566 million a year ago and now represents 56 percent of total revenue, up from 54 percent in the prior year. Laser and inkjet printer revenue was $400 million in the second quarter of 2003, up 2% versus $394 million a year earlier.
Gross profit margin was 34.0 percent for the quarter versus 32.0 percent a year ago due to the increase of supplies in the product mix and higher supplies margins, partially offset by lower printer margins. Operating expenses were $244 million compared to $216 million in the prior year due to the strength of the Euro versus the U.S. dollar and increased investment in marketing and sales. Operating income margin was 12.2 percent in the second quarter of 2003, an increase of 0.6 points over last year. Diluted net earnings per share for the period were 77 cents, an increase of 16 percent over a year ago.
Lexmark's debt-to-total-capital ratio at June 30, 2003 was 10 percent compared to 11 percent at March 31, 2003. Net cash provided by operating activities was $159 million. Capital expenditures were $16 million in the second quarter.
Launch of inkjet products
During the quarter Lexmark continued its tradition of technology leadership by launching a broad spectrum of inkjet products. Ranging in price from $49 to $249, these products feature a number of industry firsts including 4800 dots per inch print resolution across the entire line.
-- The P700 Photo Jetprinter series features borderless, six-color
printing and is the first sub-$100 photo printer that comes with an
on-board camera card reader.
-- The PrinTrio X1150 is the first All-In-One (AIO) device introduced at
a sub-$100 price point.
-- The X6170 AIO at $249 with its 50-sheet automatic document feeder is a
business-class device offering a dedicated standalone fax and
delivering print speeds of up to19 pages per minute.
Supplies annuity drives first-half EPS growth
Revenue for the six months ended June 30, 2003 was $2.228 billion, an increase of 6 percent versus $2.108 billion in the same period of 2002. First-half revenue from laser and inkjet supplies was $1.272 billion, an increase of 14 percent from $1.113 billion a year ago. Laser and inkjet printer revenue was $770 million compared to $795 million in the first six months of 2002. Gross profit margin was 33.1 percent, up 2.3 points from the prior year. Operating income was $266 million versus $227 million a year earlier, an increase of 17 percent. Net earnings for the period were $1.50 per share on a diluted basis, an increase of 25 percent over the $1.20 per share recorded in the first half of 2002.
"As we look forward to the third quarter, we believe our extensive corporate and consumer product launches in the second quarter have put us in a good position for the second half of 2003," said Curlander. "We continue to be cautious, however, due to softness in corporate and consumer spending, and aggressive pricing competition. In the third quarter of 2003, we expect a year-over-year revenue growth rate in the low- to mid-single digits and earnings per share of 63 to 73 cents, compared to 70 cents in the third quarter of 2002."
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