Updated from 7:15 a.m. EST
fourth-quarter earnings fell 47% from a year ago, reflecting lower sales and margins, and the company outlined a plan to eliminate or transfer more than 1,300 jobs.
The printer maker earned $82.3 million, or 71 cents a share, in the quarter, compared with $155 million, or $1.18 a share, a year ago. Sales fell 12% from a year ago to $1.37 billion. Analysts surveyed by Thomson First Call had been forecasting earnings of 50 cents a share on sales of $1.41 billion.
Lexmark's gross profit margin declined to 28.3% in the quarter from 32% a year ago, driven by lower product gross margins. Operating expenses as a percent of revenue increased to 20% from 19.2%, "due to the decline in revenue outpacing the reduction in operating expenses."
The company outlined a restructuring plan in which 825 jobs will be eliminated and 525 positions will be transferred to "low-cost countries." Lexmark will close a manufacturing plant in Rosyth, Scotland, and plans to freeze its pension plan while enhancing its 401(k) contribution. It pegged annual savings at $80 million.
"Although our fourth quarter EPS results were better than expected, they were significantly below a year ago, reflecting a continuation of very challenging business conditions. While we are taking steps to improve our cost and expense structure, at the same time we are committed to maintaining our strategic investments in new product development and branding to strengthen our positioning in growth market segments in which we are currently underrepresented," the company said.
For the first quarter, Lexmark expects to earn 60 cents to 70 cents a share, excluding charges for the restructuring and options expenses. Analysts were forecasting 63 cents a share.
The stock rose $4.29, or 9.4%, to $50.19.
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