Lexmark International Reports Q3 Revenue Growth of 11%
Press release from the issuing company
LEXINGTON, Ky., Oct. 20 -- Lexmark International, Inc. today announced record revenue for the third quarter ended Sept. 30, 2003. Revenue of $1.157 billion rose 11 percent, the highest year-to-year growth rate since the first quarter of 2001. Diluted net earnings per share for the quarter were 79 cents compared to 70 cents a year earlier.
"Our third-quarter results reflect strong sales of both inkjet and laser printers which with their associated supplies drove overall revenue to record levels," said Paul J. Curlander, Lexmark chairman and chief executive officer.
Third-quarter laser and inkjet printer revenue climbs 13 percent
For the third quarter, Lexmark's revenue was $1.157 billion, an 11 percent increase from the $1.041 billion reported in the same period of 2002. Laser and inkjet supplies revenue of $641 million was 55 percent of total revenue and up 13 percent from $568 million a year ago. Laser and inkjet printer revenue was $430 million in the third quarter of 2003, an increase of 13 percent from $381 million a year earlier.
Gross profit margin was 32.1 percent for the quarter versus 32.5 percent a year ago due to lower printer margins, partially offset by higher supplies margins. Operating expenses were $231 million compared with $215 million in the prior year. Operating income margin was 12.1 percent in the third quarter of 2003 versus 11.9 percent last year. Diluted net earnings per share for the period were 79 cents. This compares to third-quarter 2002 earnings per share of 70 cents, which were negatively impacted 9 cents from an asset impairment write-off.
Lexmark's debt-to-total-capital ratio at Sept. 30, 2003 was 9 percent compared to 10 percent at June 30, 2003. Capital expenditures for the quarter were $23 million.
Innovative business and consumer products launched
Lexmark continued its tradition of rapidly developing innovative technologies that meet the ever-expanding needs of its customers by introducing several industry-leading printing solutions in the quarter.
* The Lexmark X215 is the first laser multifunction product (MFP) that comes standard with an automatic document feeder and high-speed fax for just $499.
* The Lexmark E220, printing at up to 18 pages per minute (ppm), has the fastest rated print speed of any laser printer priced under $200.
* The Lexmark PrinTrio Photo P3150 is the first sub-$100 All-In-One device with built-in camera card slots.
Further enhancing this powerful product lineup, Lexmark today announced several printing solutions for its growing enterprise customer base. The new Lexmark C752 can print up to 20 ppm in monochrome and color and offers a nearly 30 percent operating cost advantage over its closest competitor. To address the growing trend of device consolidation, it is available in the new Lexmark X752e MFP, which also provides high-performance copying, faxing and scanning. The company also unveiled the Lexmark X912e MFP, a wide-format laser product that delivers up to 28 color ppm and the Lexmark Document Solutions Suite 3.2, enhanced document processing software that helps businesses improve productivity and reduce costs.
Supplies-driven business model fuels nine-month EPS growth
Revenue for the nine months ended Sept. 30, 2003 was $3.385 billion, an increase of 7 percent versus $3.149 billion in the same period of 2002. Revenue from laser and inkjet supplies grew 14 percent to $1.913 billion from $1.681 billion a year ago. Laser and inkjet printer revenue was $1.200 billion compared to $1.176 billion in the first nine months of 2002. Gross profit margin was 32.7 percent, up 1.4 points from the prior year. Operating income was $406 million versus $351 million a year earlier, an increase of 16 percent. Net earnings per share on a diluted basis for the period were $2.29, up 21 percent over the $1.89 per share recorded in the same period of 2002.
"We believe that our strong product launches this year for both home and business users position us well for the fourth quarter," said Curlander. "Nevertheless, we continue to be cautious due to the uncertain economic environment and aggressive price competition. In the fourth quarter of 2003, we expect a year-over-year revenue growth rate of mid- to high-single digits and earnings per share of 85 to 95 cents."
Lexmark is hosting a conference call with securities analysts on Monday, October 20, 2003 at 8:30 a.m. Eastern Time (888-338-6461). A live broadcast over the Internet and a complete replay of this call can be accessed from Lexmark's investor relations web site at http://investor.lexmark.com.
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