The leading printing and imaging solutions provider,
Lexmark International Inc.
(
LXK
) has won a 5-year contract worth $21.0 million, from the Federal
Aviation Administration (FAA). The contract has one base year with
four one-year options. The FAA is an arm of the U.S. Department of
Transportation (DoT) that regulates and oversees all aspects of
civil aviation.
The contract entails Lexmark, as the sole supplier of
comprehensive printing solutions to the FAA, to optimize output,
enhance productivity and reduce the cost per print and printer
downtime. Lexmark will provide the agency with its solution "Print
Release," which allows 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.
Apart from 900 FAA offices, other departments under DoT will
also enjoy Lexmark's solutions for better management of their
printing environment.
Earlier this year, Lexmark clinched two deals from the U.S.
Department of Agriculture and brewer
Anehuser-Busch InBev
(
BUD
).
Lexmark operates in a highly competitive market where there is a
constant price war between major players such as
Xerox Corp.
(
XRX
) and
Hewlett-Packard Co.
(
HPQ
) to snatch market share from one another. The market is narrowing
as digital technology and e-commerce are becoming more
prevalent.
To spur growth and reduce its dependence on hardware devices,
Lexmark is therefore introducing software solutions. In March, the
printing solutions vendor acquired three companies, namely ISYS
Search Software, Nolij Corp. and BDGB Enterprise, along with its
U.S. subsidiary Brainware Inc. All these acquisitions were made to
strengthen its Perceptive Software business, which was itself
acquired in May 2010 to help it enter the enterprise content
management market.
Lexmark reported lackluster third quarter results, with the
bottom line missing our expectation. The company also provided an
unimpressive revenue outlook for the fourth quarter. Though new
products launched during the quarter could win back some lost
market share, their impact on results could still take some
time.
Currently, Lexmark has a Zacks #3 Rank, implying a short-term
Hold rating.
ANHEUSER-BU ADR (BUD): Free Stock Analysis
Report
HEWLETT PACKARD (HPQ): Free Stock Analysis
Report
LEXMARK INTL (LXK): Free Stock Analysis Report
XEROX CORP (XRX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research