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Wednesday, 24 July 2013 10:00

Lexmark does better than expected

Written by Nick Farrell

Big contract wins 

Lexmark reported better-than-expected quarterly results and said revenue would fall less than anticipated in 2013 due to big contract wins in services and software. The company, which exited its inkjet printer business in August to focus on the more software and services, said it now expected full-year revenue to fall six to seven percent. It had earlier forecast an eight to ten percent decline.

Chief Executive Paul Rooke said the improved position was due to new contracts in the managed print services (MPS) business this year, with an average value of $50 million. The deal wins include brewer Anheuser Busch. The revenue share from the inkjet business is expected to be less than 10 percent by the end of the year. The business contributed 21 percent of revenue in 2011.

Lexmark has stopped production of its inkjet printers, but continues to supply ink and support existing printers. Meanwhile Lexmark’s Perceptive software business, which includes business process management and medical imaging software has grown at a combined rate of about 15 percent this year.

But the outfit said that the spending environment was still sluggish and the company was beginning to see the impact of government sequestration.

"We're still seeing hardware deferrals, some cases some rollout deferrals just as companies are pruning their budgets and prioritizing their budgets," Rooke said on a conference call with analysts.

Nick Farrell

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