Clear Choice Technical Services of San Francisco

Contact Us Now
(415) 423-0663 Live Chat Software

Lexmark’s ‘Perceptive’ Strategy Pays Off Well Ahead of Schedule

October 29, 2013 By Admin

Lexmark’s decision a little more than a year ago to exit the inkjet printing business wouldn’t look quite as brilliant today if not for the tremendous and immediate performance of its Perceptive Software unit. With more services and software acquisitions under its belt – and surely more on the way – CEO Paul Rooke and company are reminding everyone in this industry that more is often lost by indecision than any one wrong (or risky) decision.

Rather bemoan what we already know – printing has and will continue to decline and hardware sales will, for the most part, follow suit – let’s acknowledge that Lexmark and most of the other top-tier OEMs have and still do make a ton of money from this retracting sector. No matter how dire the outlook, how bleak the landscape, it’s still not easy for any publicly traded company to prematurely walk away from millions of dollars in profits.

Saying that, Lexmark deserves credit for making the best and most forward-thinking decision – some might say the only decision – to abandon a dying, albeit lucrative, cornerstone of their business and identity in favor of new businesses based on services and managed digital content. It’s the same conclusion that all the other major OEMs – some faster and more significantly than others – have come to as they awkwardly (and slowly) kiss the traditional printing model goodbye before sneaking off to Silicon Valley to sync up with their digital mistresses.

So far, so good. But it didn’t come easy. Laying off about 13 percent of your workforce and eating roughly $160 million in restructuring chargers never is.

However, the Perceptive Software unit it acquired in 2010 recorded sales of $59 million in the third quarter, up 38 percent from the year-ago quarter. Overall, Lexmark’s Imaging Solutions and Services unit checked in with $837 million in the quarter and managed print services sales surged up 18 percent to $184 million. Meanwhile, inkjet sales plummeted 44 percent from the prior year to just $84 million, or less than 10 percent of the company’s total sales in the three-month period.

“Lexmark’s value proposition is unique and squarely focused on helping our customers solve their unstructured information challenges, enabling us to lead in this large and expanding market,” Rooke said in the earnings release.

Amen.

Building the new-look Lexmark byte by byte

Perceptive Software isn’t the only enterprise content and document management software acquisition putting fresh wind behind Lexmark’s sails.

In August, it shelled out $72 million for Saperion AG, an ECM and business process management software with customers including Lufthansa, Vodafone, Daimler and Siemens. In March, it snapped up ISYS Search Software, an Australian company that builds enterprise search solutions, for $32 million and Nolij Corp., a developer of Web-based document imaging and workflow software, for about the same amount.

And earlier this month, it paid $54 million in cash for PACSGEAR, a leading provider of connectivity solutions for hospitals and health care facilities. PACSGEAR solutions, which are used to capture, manage and share medical images and other relevant documents, will be incorporated into Lexmark’s picture archiving and communication systems (PACS) and electronic medical records (EMR) systems.

Throw in San Francisco-based Twistage, which developed a cloud platform for managing video, audio and image content and Seattle-based AccessVia, which makes software that prints on-demand in stores on printers, MFPs and handheld devices, and you can see where Lexmark thinks it belongs today, tomorrow and long into the future.

“Lexmark is continuing to increase shareholder value through acquisitions and organic investments that are accelerating our transition to a higher value solutions portfolio, and through the ongoing capital return of more than 50 percent of free cash flow,” Rooke added.

Rave reviews from Wall Street

This aggressive, expensive and foreward-thinking strategy manifested in a much-better-than-expected third quarter across the board. Total sales checked in at $890.5 million – well above the $871.7 million consensus estimate – while net income, excluding one-time items and charges, came in at 95 cents a share, besting the Street forecast of 91 cents a share.

But it gets even better.

Lexmark, which had been projecting combined sales growth of about 15 percent for its Perceptive Software and MPS units, now expects those figures to “be a little more as we finish up the fourth quarter,” according to Rooke.

After drastically revising its full-year sales estimates as the unavoidable consequence of turning its back on the inkjet crowd, Lexmark is now raising its 2013 sales and earnings targets entirely on the strength of these new software and services units. Now its full-year sales are expected to only decline by between 5 percent and 6 percent – a slight but certain improvement from the 6 percent to 7 percent it originally forecast.

This double dose of good news pushed Lexmark (NYSE: LXK) shares up 7 percent in the hours immediately following the earnings release on Tuesday. Earlier in the week, Tigress Financial upgraded the stock from a “buy” to a “strong buy” recommendation.

For now, seven of the 11 analysts following Lexmark maintain an “underperform” rating on the stock, while three others have assigned it either a “hold” or “neutral” recommendation.

Zacks Investment Research is one of the firms that reiterated its “neutral” rating on the stock shortly after the third-quarter results and full-year outlook were revealed.

“Though synergies from the recent acquisitions and renewed focus on the software space could set it back on the growth path, their impact on results could still be some way off,” a Zacks analyst wrote in a research note. “Though constant pricing pressure from competitors such as Canon, Xerox and Hewlett-Packard and a high debt burden will be concerns, we expect Lexmark to turn the tables with an increased focus on software and services.”

Expect more of this same “focus” from Lexmark and its OEM brethren throughout 2014.

Posted by Larry Barrett on 10/28/2013

Filed Under: Uncategorized

Want Us to Contact You with a Quote

FAST - EASY - FREE "1min Fill in Below"

Don’t Miss Our Latest Promos. Subscribe Our Newsletter Now!

Newsletter

San Francisco, CA 94104

(415) 423-0663


Affordable Copiers – Service Area we Cover

Los Angeles, San Diego, San Jose, East San Gabriel Valley, San Francisco, Fresno, Sacramento, Long Beach, Oakland, Bakersfield , Anaheim, Santa Ana, Riverside, Stockton, Chula Vista, Irvine, Fremont, San Bernardino, Modesto, Oxnard, Fontana, Moreno Valley, Huntington Beach, Glendale, Santa Clarita, Garden Grove, Oceanside, Rancho Cucamonga, Santa Rosa, Ontario, Elk Grove, Corona, Lancaster, Palmdale, Coachella Valley, Salinas, Hayward, Pomona, Escondido, Sunnyvale, Torrance, Pasadena, Orange, Fullerton, South Bay Cities, Thousand Oaks, Visalia, Roseville, Concord, Simi Valley, Santa Clara, Victorville, Vallejo, Berkeley, El Monte, Downey, Costa Mesa, Carlsbad, Inglewood, Fairfield, Ventura, Temecula, Antioch, Richmond, West Covina, Murrieta, Norwalk, Daly City, Burbank, Santa Maria, El Cajon, San Mateo, Rialto, Clovis, Compton, Vista, Mission Viejo, South Gate, Vacaville, Carson, Santa Monica, San Marcos, Hesperia, Arden-Arcade, Westminster, Redding, Palos Verdes, Santa Barbara, San Leandro, Chico, Loomis Basin-Folsom Lake, Hawthorne, Whittier, Newport Beach, Livermore, Citrus Heights, Tracy, Indio, Alhambra, Chino, Buena Park, Hemet, Redwood City, Merced, Lakewood, Tustin, Lake Forest, Napa, Mountain View, Bellflower, Pleasanton, Alameda, Baldwin Park, Chino Hills, Upland, Folsom, San Ramon, Perris, Milpitas, Union City, Manteca, Apple Valley, Turlock, Redlands, San Gorgonio Pass, Rancho Cordova, Redondo Beach, Pittsburg, Yorba Linda, Walnut Creek, Palo Alto, Camarillo, Davis, Yuba City, Laguna Niguel, San Clemente, Pico Rivera, Lodi, Montebello, Madera, Florence-Graham, Santa Cruz, Encinitas, La Habra, Tulare, Carmichael, Monterey Park, Castro Valley, Cupertino, Gardena, Rocklin, National City, Lake Elsinore, Petaluma, Huntington Park, San Rafael, La Mesa, Arcadia, Woodland, Santee, Brentwood, Fountain Valley, Diamond Bar, Porterville, Hanford, Novato, Rosemead, Dublin, Highland, Colton, Cathedral City, Watsonville, Yucaipa, Delano, Gilroy, Placentia, West Sacramento, Glendora, Palm Desert, Aliso Viejo, Cerritos

Zip codes: 94102, 94103, 94104, 94105, 94107, 94108, 94109, 94110, 94111, 94112, 94114, 94115, 94116, 94117, 94118, 94121, 94122, 94123, 94124, 94127, 94131, 94132, 94133, 94134, 94158.

Get Free VOIP Phone System Quotes! Yes Click Here

We Work On Most Models

Copier Lease San Francisco Supported Brands

Copy Machine Service Location


555 California Street San Francisco, California 94104
Phone Number: (415) 423-0663
 

Business Hours

Mon-Fri: 8:00AM - 5:00PM
Sat-Sun: Closed

Clear Choice Technical Services of San Francisco

  • Copy Machine Maintenance
  • Copier Rentals and Leasing
  • Copier Sales
  • Copier Repair
  • Copier Lease San Francisco
  • Copy Machine Rentals
  • Blog

Copier Lease San Francisco

  • Canon Copiers
  • Copier Lease San Francisco CA
  • CopyStar Copiers
  • Gestetner Copiers
  • Konica Minolta Copiers
  • Kyocera Copiers
  • Kyocera Copiers
  • Lanier Copiers
  • NEC Copiers
  • Océ Copiers
  • Panasonic Copiers
  • Photocopier Machine
  • Canon Photocopiers
  • Copier Machine
  • Copier Machines
  • Multifunction Printers
Copyright © 2022. Copier Lease Specialist. All Rights Reserved.