Printer maker Lexmark International Group Inc has reported first quarter net income of $49.5m, or $0.69 per share, blowing away consensus estimates of $0.53. The results compare to net income of $16.7m ($0.22) in the year-ago period, which included a one- time charge of $14m stemming from the early extinguishing of debt. The Lexington, Kentucky company saw revenue for the quarter grow 15% to $672.1m and says growth was 20% in constant currency. Revenue from printers and associated supplies – which accounted for 83% of business – rose 22% year-over-year. Sales were up in all geographies except Asia-Pacific and unit growth occurred in both the network laser printer line and color inkjet models. Gross margins increased by 2.5 points to 36.7%, due mostly to a greater mix of printer supplies versus printer hardware. Operating expenses increased slightly to 25.1% of revenue from 24.7%. In addition to a 40% increase in operating income, the massive leap in earnings per share came as a result of reduced interest expense, a lower tax rate and fewer outstanding shares. Looking ahead, the company is optimistic about strong second- quarter results, but warns that results in the second half of the year will face a tougher comparison to last year’s numbers. Lexmark shares responded to the news by jumping $11.25, or nearly 24%, to $59 on Monday.
