Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Lexmark Inc. (LXK - Analyst Report) recently commenced a public offering of senior notes worth $400.0 million. The notes will carry an interest rate of 4.875% and are set to mature on Mar 15, 2020.

Lexmark filed for the registration with the U.S. Securities and Exchange Commission. J.P. Morgan Securities LLC (an unit of J.P. Morgan Chase & Co. (JPM - Analyst Report)) and Citigroup Global Markets Inc. (an unit of Citigroup Inc. (C)) are acting as administrative agents for the purpose, along with certain other lenders. The offer will cease on Mar 4.

The raised amount (after deducting issue-related expenses) will enable Lexmark to increase fund availability and finance its continuing working capital requirements, capital expenditure, facilitate the repayment of its 5.90% senior notes due in 2013, and also fund potential acquisitions.

In a separate development, Lexmark also announced to repay its outstanding 5.90% senior notes scheduled in Mar 2013. The redemption price will consist of a premium and any accrued or unpaid interest due till the day before maturity date.

Lexmark exited fourth quarter 2012 with $905.8 million in cash and cash equivalents, up from $859.3 million reported in the previous quarter. Lexmark has a senior notes balance of $649.6 million, which will go up another $400.0 million after this issue. Of the total senior notes outstanding, $350.0 million notes are scheduled to be repaid in the shot term. The company is also repaying 5.90% senior notes, which will bring down the total liability.

Lexmark’s fourth quarter results were not encouraging as its earnings per share (EPS) missed the Zacks Consensus Estimate by a wide margin. Revenues came below the year-ago period but were better than expected. Guidance for the first quarter was deterring, too, reflecting inkjet exit and macro uncertainty.

Though constant pricing pressure from competitors such as Canon Inc., Xerox Corp. (XRX - Analyst Report) and Hewlett-Packard Co. (HPQ - Analyst Report) is a concern, we expect Lexmark to turn the table with increased focus on software and services.

Currently, Lexmark has a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%