Lexmark International today announced record revenue for the third quarter ended 30 September 2003. Revenue of $1.157 billion rose 11%, the highest year-to-year growth rate since the first quarter of 2001. Diluted net earnings per share for the quarter were 79c compared to 70c 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," says Paul J Curlander, Lexmark chairman and CEO.
Q3 laser and inkjet printer revenue climbs 13%
For the third quarter, revenues were $1.157 billion, an 11% increase from the $1.041 billion reported in the same period of 2002. Laser and inkjet supplies revenue of $641 million was 55% of total revenue and up 13% from $568 million a year ago. Laser and inkjet printer revenue was $430 million in the third quarter of 2003, an increase of 13% from $381 million a year earlier.
Gross profit margin was 32.1% for the quarter versus 32.5% 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% in the third quarter of 2003 versus 11.9% last year. Diluted net earnings per share for the period were 79c. This compares to third-quarter 2002 earnings per share of 70c, which were negatively impacted 9c from an asset impairment write-off.
The company`s debt-to-total-capital ratio at 30 September 2003 was 9% compared to 10% at 30 June 2003. Capital expenditures for the quarter were $23 million.
Innovative business and consumer products launched
Lexmark continued its tradition of rapid development of technologies by introducing several new 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.
* The Lexmark E220, printing at up to 18 pages per minute (ppm), has the fastest rated print speed of any laser printer.
* The Lexmark PrinTrio Photo P3150 is the first sub-$100 All-In-One device with built-in camera card slots.
Further enhancing its product lineup, Lexmark also announced several printing solutions for its enterprise customer base. The new Lexmark C752 can print up to 20ppm in monochrome and colour and offers a nearly 30% operating cost advantage over its closest competitor. To address the growing trend of device consolidation, the new X752e MFP provides high-performance copying, faxing and scanning. The company also unveiled the X912e MFP, a wide-format laser product delivering up to 28 colour 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 30 September 2003 was $3.385 billion, an increase of 7% versus $3.149 billion in the same period of 2002. Revenue from laser and inkjet supplies grew 14% 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%, up 1.4 points from the prior year. Operating income was $406 million versus $351 million a year earlier, an increase of 16%. Net earnings per share on a diluted basis for the period were $2.29, up 21% over the $1.89 per share recorded in the same period of 2002.
Looking forward
"We believe that our strong product launches this year for both home and business users position us well for the fourth quarter," says 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 85c to 95c."
For further information, please contact Cathy Steyn at telephone (011) 329 0999; fax (011) 792 7449; e-mail cathryn.steyn@lexmark.co.za.
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