Lexmark to write off Oracle project
The printer maker will take a third-quarter $15.8 million write-off for abandoning the software, but still expects a jump in revenue.
The project involved an Oracle customer relationship management (CRM) project, a Lexmark spokesman said. He said the company could not give any more information about the project or why it was abandoned, until the company formally reports third-quarter results on Oct. 21.
Oracle officials did not immediately return calls for comment.
Despite the charge, the printer maker expects to report a 4 percent to 5 percent jump in third-quarter revenue compared with a year ago.
The charge will knock 9 cents a share off of Lexmark's bottom line, but the company still expects to post earnings of 68 cents to 70 cents per share, up from 52 cents per share a year ago. The company had earlier predicted earnings of 58 cents to 68 cents per share.
For the fourth quarter, Lexmark said it sees revenue growing in the low- to midsingle digits compared with a year ago with earnings per share of between 67 cents to 77 cents.
Wall Street analysts were expecting the company to report earnings of 64 cents per share for the third quarter, and 72 cents per share for the fourth quarter, according to First Call.
Last month, Lexmark signed a deal with Dell Computer to create Dell-branded inkjet and laser printers, and printer supplies that will be sold directly to consumers. Dell also plans to make Lexmark its preferred printer supplier for the holiday-shopping season, ahead of competitor Hewlett-Packard.