Lexmark International, Inc. announced financial results for the fourth quarter of 2006. Fourth-quarter revenue was $1.369 billion, about flat compared to revenue of $1.365 billion last year. Fourth-quarter earnings per share were $0.91 and include $0.06 per share for share-based compensation expenses resulting from the company’s adoption of SFAS 123R. The tax rate in the fourth quarter was 15.9 percent, primarily reflecting the retroactive extension of the U.S. Research and Experimentation tax credit. Earnings per share would have been $1.05, excluding $0.14 per share restructuring-related charges for actions announced in January 2006. Fourth-quarter 2005 earnings per share were $0.71.
“Overall, this was a good quarter for Lexmark and we believe we are on course with our strategy. We saw strong branded unit growth in the quarter in our targeted growth segments of low-end monochrome lasers, color lasers, laser all-in-ones, and inkjet all-in-ones. Our ongoing investments in product and brand development are better positioning us in these targeted segments, which are the engine for long-term growth,” said Lexmark Chairman and Chief Executive Officer Paul J. Curlander.
Fourth-quarter business segment revenue of $772 million grew 11 percent year to year, and consumer segment revenue of $597 million declined 11 percent compared to a year ago. Fourth-quarter 2006 gross profit margin was 30.8 percent, the operating expense to revenue ratio was 23.3 percent, and operating income margin was 7.5 percent. These results include restructuring-related pretax charges totaling $19 million, comprised of $3 million in cost of revenue and $16 million in operating expense. Excluding restructuring-related charges:
Fourth-quarter net cash provided by operating activities was $143 million. Capital expenditures for the quarter were $58 million. Lexmark repurchased approximately 2.1 million shares of its stock during the quarter for $141 million. The company’s remaining share repurchase authorization was about $460 million at quarter end.
