*NEWS*LEXMARK:CHANNEL INV’s PAYING OFF

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*NEWS*LEXMARK:CHANNEL INV’s PAYING OFF

 user 2007-09-10 at 10:10:00 am Views: 59
  • #18717
    Lexmark Exec Says Channel Investments Paying Off

    SEP 07 Lexmark, which has been under profit pressure for the past quarter, continues to bank on investments it has made in broadening its product lineup and in building out its solution provider channel, a top executive said Wednesday.John Gamble, CFO of the Lexington, Ky.-based printer company, made his remarks at the Citigroup Global Technology Conference in New York. He declined to say when the company’s profit margin would bounce back from its current rough patch — including the last quarter when the company fell shy of Wall Street’s earnings estimates. But he said Lexmark continues to make strategic investments where the company believes they will do the most good.Lexmark has launched several new products this year, including wireless inkjet printers for the low-end space, color multi-function printers, and an MFP tailored for the legal vertical market. The company has also continued to work on building out its ranks of solution providers, since introducing a new channel program almost two years ago. At the same time, Lexmark has made some management changes — moving Paul Rooke, who had been president of its printing division, to head up its consumer unit, and named Marty Canning as president of its printing services and solutions division.”We’re feeling better and better about the strength of the portfolio we’re bringing to market,” Gamble said. “We began investing more heavily in the past year on the resources to bring (new) product to market. If you look over what we’ve done in the past year in terms of growth in MFPs, and color and higher-end placements and in the enteprrise business where we have historically been strong, and in vertical industries where we’ve been strong, we think we’ve seen very good performance and we think we’ve grown very well.”"Over the past several years, we’ve increased development spending, we’ve increased spending on the channel,” Gamble said, noting that Lexmark has seen the greatest return on channel investment in the higher-end laser printer segment.The company remains under pressure, though, with some on Wall Street offering skepticism about a near-term turnaround for Lexmark. Last week, Goldman Sachs issued a report on Lexmark — on which it has a “sell” rating — that lowered its stock price target from $45 to $40, saying, among other things, that its “core inkjet franchise continues to erode at the hands of better funded competition like HP.”