The Cambridge-based inkjet manufacturer said that it now expected 2014 full-year group revenue to be near the top end of the range it announced in October at around £108m and that profit would be higher than market expectations as a result.
Xaar chief executive Ian Dinwoodie said: "There's not a lot in it but we gave a [revenue] range in October and given what's happened this year everyone went to the bottom of it, but actually we're coming in slightly higher."
The news comes on the back of a stabilisation in demand from Chinese ceramic tile printers, which has fallen this year on the back of the sharp drop in construction activity arising from the slowdown in the Chinese economy.
As this part of the business represents two-thirds of Xaar's sales, the Chinese slowdown hit Xaar hard, leading to profit warnings in June, August and October.
Ian Dinwoodie, chief executive of the Cambridge-based inkjet manufacturer, said: "It's the level of construction activity that drives investment [in ceramic tile decoration]; the key is that it has stabilised in Q4, although obviously at a lower level than we expected a year ago."
The revised revenue figure would represent a 19.5% reduction on Xaar's 2013 turnover of £134.1m, although Xaar has previously pointed out that 2013 was an exceptional year in which revenue jumped 55% on the back of the conversion of a large chunk of the Chinese ceramic tile market to digital.
Compared with Xaar's 2012 turnover of £86.3m, 2014 group revenue of £108m would represent 25% growth in two years.
Xaar reaffirmed its view that total sales next year will not exceed £100m, which it said reflected a "broadly consistent level of sales across all applications at the present level of demand".
Dinwoodie said: "Activity levels are lower but at least they're stable. We're not expecting any positive upside [next year] but we're not expecting things to get any worse either."
Meanwhile, Xaar has completed the restructuring announced in October, which resulted in a 20% reduction in its global workforce (160 of 800 jobs), including 120 jobs at Xaar's Huntingdon manufacturing facility.
Dinwoodie, who is due to step down next year, said the company was on track to announce his replacement some time in Q1 2015, while the group expects to announce its 2014 financial results on 19 March 2015.
