Lexmark gains on Q2 beat, strong guidance

In addition to beating Q2 estimates, Lexmark (LXK +3.5%) expects Q3 revenue to be flat to down 2% Y/Y, and EPS to be in a range of $0.85-$0.95. That's mostly above a consensus for -3.2% growth and EPS of $0.95.

Lexmark is also guiding for 2014 revenue to be flat to down 2% (consensus is -2.8%), and EPS to be in a range of $3.95-$4.15 (consensus is $3.93).

Hardware revenue rose 7% Y/Y in Q2 to $183M, a turnaround from Q1's 8% drop and helping fuel the Q2 beat. Supplies revenue -1% Y/Y (to $602M) vs. -1% in Q1, software/other revenue -1% (to $106M) vs. +13% in Q1.

Laser supplies (+5%) were a strong point, as were sales related to Lexmark's managed print services business (+14% to $195M). Legacy inkjet revenue fell 33%.

Gross margin +40 bps Y/Y to 40.8%. Opex +2% to $267M. $19M was spent on buybacks.

Q2 results, PR

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