Leading printing and imaging solutions provider Lexmark International Inc. has won a 5-year contract worth $20.0 million from renowned oil and gas producer Statoil ASA .
The contract makes Lexmark the sole supplier of comprehensive printing solutions to Statoil that are expected to optimize output, enhance productivity and reduce cost per print and printer downtime. Lexmark will provide the energy company with its “Print Release” solution, which provides utmost security in printing activities.
Print Release, introduced in October 2011, allows users to print documents from any networked device on the premise, after the user furnishes personal details to authenticate the activity. Moreover, the solution also takes printing requests from smartphones or tablets, thus helping a mobile workforce.
The proven benefits of Print Release also prompted the Federal Aviation Administration (FAA), which is an arm of the U.S. Department of Transportation (DoT), to opt for the printing service. Apart from the 900 FAA offices, other departments under DoT also used Lexmark’s solutions for better management of their printing requirements.
Earlier this year, Lexmark clinched two print services deals from the U.S. Department of Agriculture and brewer Anehuser-Busch InBev (BUD - Free Report) .
Lexmark operates in a highly competitive market where there is a constant price war between major players such as Xerox Corp. (XRX - Free Report) and Hewlett-Packard Co. (HPQ - Free Report) . Additionally, the scope for printing solutions is narrowing as digital technology and e-commerce are becoming more prevalent.
However, considering Lexmark’s strength in the Managed Printing Services segment and growing exposure in the software space through back-to-back acquisitions, we remain bullish on the stock.
Currently, Lexmark has a Zacks #2 Rank (short-term Buy rating) and a long-term Hold recommendation.