Lexington Herald Leader Logo

Dell still Lexmark's biggest buyer | Lexington Herald Leader

×
  • E-edition
  • Home
    • All News
    • Business
    • Communities
    • Counties
    • Crime
    • Education
    • Lexington
    • Local
    • Most Wanted
    • Nation/World
    • News Photos
    • News Videos
    • Politics
    • Searchable Databases
    • State
    • Watchdog
    • Columns
    • Tom Eblen
    • All Sports
    • UK Sports
    • College Sports
    • Next Cats Recruiting
    • High School
    • Horses
    • Kentucky Speedway
    • Lexington Legends
    • Reds
    • MLB
    • NBA
    • NASCAR
    • NFL
    • Sports Photos
    • Sports Videos
    • Columns
    • John Clay's Columns
    • Mark Story
    • Next Cats Recruiting
    • All UK Sports
    • Next Cats Recruiting
    • Baseball
    • Basketball - Men
    • Basketball - Women
    • Recruiting
    • Ex-Cats
    • Football
    • UK Photos
    • UK Videos
    • More UK Sports
    • Columns
    • John Clay's Blog
    • Mark Story
    • Politics
    • Elections
    • All Entertainment
    • Books
    • Celebrities
    • Comics
    • Puzzles & Games
    • Events Calendar
    • Horoscopes
    • Movies
    • Music
    • Restaurants
    • Stage & Dance
    • TV
    • Visual Arts
    • Entertainment Photos
    • Entertainment Videos
    • News Blogs
    • Kentucky Weather
    • Photo Archive
    • Sports Blogs
    • John Clay's Blog
    • High School
    • UK Football
    • UK Men's Basketball
    • UK Women's Basketball
    • Lexington Legends
    • Entertainment Blogs
    • Walter Tunis on Music
    • All Opinion
    • Editorials
    • Joel Pett
    • Letters to the Editor
    • National Columnists
    • Op-Ed
    • Submit a Letter
    • All Living
    • Celebrations
    • Family
    • Fashion
    • Food & Drink
    • Fru-Gal: Deb Morris
    • Health & Medicine
    • Home & Garden
    • Paul Prather
    • Religion
    • Travel
    • Readers' Choice
    • Kentucky Obituaries
    • Obituaries in the News
    • Submit an Obituary
    • Customer Service
    • Contact Us
    • About Us
    • E-edition
    • Page Reprints
    • Photo Reprints
    • RSS Feeds
    • Special Sections
    • Site Information
    • Advertise With Us
    • Archives
    • Mobile
    • Mobile Apps & eReaders
    • Newsletters
    • Social
    • Facebook
    • Twitter
    • Instagram
    • YouTube
    • Google+
    • Today's Circulars
    • Classifieds
    • Jobs
    • Cars
    • Homes
    • Homeseller
    • Legal Notices
  • Place an Ad
  • Mobile & Apps

Business

Dell still Lexmark's biggest buyer

By Scott Sloan - ssloan@herald-leader.com

    ORDER REPRINT →

February 07, 2011 12:00 AM

Computer maker Dell remained the top customer of Lexington-based printer maker Lexmark International in 2010. Dell accounted for 10 percent of Lexmark's revenue during the year, down from 12 percent in 2009.

Lexmark manufactures printers for Dell, which then sells them under the Dell brand. That business, commonly called OEM for original equipment manufacturer, has declined in recent years. Dell accounted for 13 percent of revenue in 2008 after having been 15 percent in 2005, 2006 and 2007, when Lexmark's total revenue was higher than it is today.

The declines, though, have some upside, said Ed Crowley, founder of Versailles-based printer-industry research firm The Photizo Group.

"Quite honestly, it wouldn't surprise me if that wasn't OK with them," he said of Lexmark management, explaining that profit margins are typically lower on OEM products than on printers sold under a company's own name.

Sign Up and Save

Get six months of free digital access to the Lexington Herald-Leader

SUBSCRIBE WITH GOOGLE

#ReadLocal

"As a smaller player ... you're going to want to get some high-margin business," Crowley said. "Margin becomes more important than volume. That will drive a lot of decision-making."

Perceptive Software

Lexmark announced Tuesday that its recently acquired Perceptive Software business generated revenue of $22 million in the fourth quarter. That was up 11 percent from the third quarter, executives said. The Kansas-based company develops software that helps businesses manage content. During the fourth quarter, Perceptive released its first application co-developed with Lexmark called "Interact."

Research spending up

For the first time in several quarters, Lexmark spent more on research and development year over year. During the quarter, the company spent $96.7 million, up from $93.3 million a year ago.

Chief Financial Officer John Gamble Jr. told analysts that the increase came because of the acquisition of Perceptive Software. Before that, the company had been consolidating some projects, which led to the decline in spending.

No stock repurchases

For the second consecutive year, Lexmark did not repurchase any of its outstanding stock in 2010. Before 2009, the company had been aggressively buying back stock, including spending more than $1 billion in 2005 to buy 17 million shares.

The company halted purchases in recent quarters as much of its cash is overseas, and it would have to pay a certain amount to be able to bring it back to the United States to fund share repurchases.

The company had billed the program as a way to return value to shareholders, but some industry observers were skeptical.

Crowley said Lexmark's moves the past two years are wise. Given its smaller size compared to rivals like HP and Canon, the company should spend its cash "on development and buying other companies, which I think drive more shareholder value long-term."

Printers hailed by critics

Lexmark has been calling attention to critical praise of its recent laser and inkjet printer lines. In an internal assessment released during the earnings period, Lexmark announced its printers earned 24 percent of industry awards in 2010 while its next closest competitor earned 13 percent.

The company also began 2011 by having its new Genesis all-in-one inkjet printer recognized at the Consumer Electronics Show. The printer boasts new scanning technology that essentially uses a camera to take a snapshot of documents that need to be scanned. It replaces the common older scanning method in which a scanner moves more slowly across an image.

  Comments  

Videos

A true Appalachian taste test: What do we think of Dueling Barrels moonshine?

Co-owner of Willie’s Locally Known asks fans to come dine at the restaurant

View More Video

Trending Stories

UK student got a chance to win $19,000 with a half-court shot. He nailed it.

February 16, 2019 12:41 PM

Dontaie Allen honored at Rupp during Kentucky’s busy recruiting night

February 16, 2019 08:30 PM

Here’s what John Calipari had to say after Kentucky’s blowout of No. 1 Tennessee

February 16, 2019 11:47 PM

PJ Washington leads Kentucky to a convincing victory over Tennessee

February 16, 2019 10:30 PM

Even Tennessee’s players agreed: ‘Kentucky was totally kicking our butt.’

February 17, 2019 01:07 AM

Read Next

This Lexington business creates software to help bring order to information

Business

This Lexington business creates software to help bring order to information

By Tom Martin

    ORDER REPRINT →

February 17, 2019 09:00 AM

This Lexington business is creating software that offers content management solutions for architects, contractors, engineers.

KEEP READING

Sign Up and Save

#ReadLocal

Get six months of free digital access to the Lexington Herald-Leader

SUBSCRIBE WITH GOOGLE

MORE BUSINESS

Hundreds stranded as British airline Flybmi collapses

Business

Hundreds stranded as British airline Flybmi collapses

February 17, 2019 07:28 AM

Business

Libyan authorities help free 14 kidnapped Tunisian workers

February 17, 2019 04:55 PM

Business

Houston asking to have firefighter pay measure invalidated

February 17, 2019 04:45 PM
Aurora shooter’s permit was revoked but gun wasn’t seized

Business

Aurora shooter’s permit was revoked but gun wasn’t seized

February 17, 2019 05:15 PM

Business

Coal train derails in northeast Minnesota

February 17, 2019 04:20 PM
Return to sender: High court to hear undeliverable mail case

Business

Return to sender: High court to hear undeliverable mail case

February 17, 2019 04:19 PM
Take Us With You

Real-time updates and all local stories you want right in the palm of your hand.

Icon for mobile apps

Lexington Herald Leader App

View Newsletters

Subscriptions
  • Start a Subscription
  • Customer Service
  • eEdition
  • Vacation Hold
  • Pay Your Bill
  • Rewards
Learn More
  • About Us
  • Contact Us
  • Newsletters
  • News in Education
  • Archives
Advertising
  • Contact Us
  • Place a Classified Ad
  • Local Deals
  • Digital Solutions
  • Media Kit
Copyright
Privacy Policy
Terms of Service


Back to Story