- Though Lexmark (NYSE:LXK -1.1%) beat Q1 estimates, it's guiding for 2015 revenue to be down 3%-5% Y/Y, mostly below a consensus for a 3.2% drop. On the other hand, 2015 EPS guidance of $3.60-$3.80 is mostly above a $3.61 consensus. "Core revenue" (excludes inkjet supplies) is expected to be down slightly Y/Y.
- Q2 guidance is for a 2%-4% Y/Y revenue drop and EPS of $0.75-$0.85 vs. a consensus for a 3.7% drop and EPS of $0.79.
- A 40% Y/Y increase in enterprise software revenue to $90M (boosted by the ReadSoft acquisition) lifted Q1 sales. On the other hand, laser/dot matrix printer and supplies revenue fell 6% to $533M, and inkjet exit supplies revenue fell 34% to $48M. Managed print services revenue grew 3% to $185M.
- Gross margin (non-GAAP) fell to 40.5% from 41% a year ago, while operating expenses were flat at $287.7M. $30M was spent on buybacks.
- Annuity revenue, a term that covers laser supplies, software maintenance/subscriptions, and warranties, is now 70% of core revenue, and was up 5% Y/Y to $2.42B on a trailing 12 month basis. The software deferred revenue balance rose 35% Y/Y.
- Shares remain 6% above where they traded before Lexmark announced the Kofak deal (expected to close in Q2) on March 24.
- Q1 results, PR