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What: Shares of Lexmark (NYSE: LXK) have popped today by greater than 17% following the company's first-quarter earnings release.

So what: Revenue in the quarter came in at the high end of guidance at $884 million, topping the consensus estimate of $873.6 million. The same is true for Lexmark's non-GAAP earnings per share of $0.88, which was more than the $0.87 per share adjusted profit that investors were expecting. CEO Paul Rooke said Lexmark continues to transition from a hardware-centric model to a solutions-centric approach, which is underscored by the recent acquisitions of two software companies and the sale of the inkjet business.

Now what: Lexmark said it's sticking by its capital allocation policy of returning over 50% of free cash flow to investors on average. In the first quarter, the company paid $19 million in dividends, or $0.30 per share, and repurchased $21 million in shares. The current share repurchase authorization has $230 million remaining. Not everyone was impressed, as Barclays subsequently downgraded shares from "equalweight" to "underweight."

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Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.