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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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