Tuesday, February 19, 2013

Lexmark Finally Admit the Drawbacks of their Inkjet Exit Industry

As of January 29, Lexmark International Inc. revealed the financial results of their sales for the fourth quarter and full year of 2012. Unfortunately though, the company's total revenue dropped to 9 percent, gaining a total revenue of $967 million for the whole last quarter of 2012 compared to 2011's revenue of $1.060 billion last year. Lexmark's Imaging Solutions and Services (ISS) which had a revenue of $925 million decreased about 10 percent compared to the same period last year.

In their official press release, Lexmark also stated the negative effects of their InkJet Exit strategy: "Inkjet Exit revenue of $147 million declined 26 percent year to year. Inkjet Exit revenue represented 15 percent of total company revenue and is expected to decline as a percentage of total revenue with the company's decision to exit its remaining inkjet hardware for improved profitability."

In their overall report, Lexmark Chairman and Chief Executive Officer Paul Rooke gave a statement on the company's current situation and how he sees the future of Lexmark will be in the following years:

"Our fourth quarter financial results were highlighted by revenue that exceeded expectation, solid cash flow generation, and ongoing growth in Perceptive Software and managed print services revenue," said Rooke. "In 2012 we strengthened our solutions portfolio through four software company acquisitions, and launched one of Lexmark's most significant laser line advancements with solutions-enabled devices that extend our smart MFP and managed print services leadership."

"We are expecting to deliver savings of $85 million in 2013 from the actions announced last August, and we are well positioned to generate positive free cash flow as we have for each of the past 11 years," added Rooke. "We continue to execute on our capital allocation strategy of rewarding shareholders through share repurchases and dividends while pursuing acquisitions that further expand and strengthen our solutions offerings."

Although Lexmark had finally say its goodbye to the inkjet printing industry, it continues to sell Lexmark inks and other inkjet printer supplies to support those who are using their Lexmark inkjet printers. But of course, this also made a different impact to third-party manufacturers who also sell alternative compatible and remanufactured Lexmark ink cartridges.

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