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 user 2009-07-24 at 1:46:30 pm Views: 41
  • #22630

    Lexmark Profit Drops 80%, Sees Weaker 3rd Quarter
    * Q2 share $0.22 vs $0.89
    * Q2 rev $904.6 mln vs $1.14 bln
    * Sees Q3 EPS of 40-50 cents vs expectations 52 cts
    * Shares down 19.5 pct

    YORK, July 09 – Lexmark International Inc on Tuesday posted
    weaker-than-expected quarterly results on poor demand for printers and
    supplies, and forecast third-quarter profit that fell short of
    analysts’ views.Lexmark, whose shares fell 19 percent, has been
    shrinking its focus on lower-end printers as it tries to boost sales to
    high-volume users who print many pages and use more supplies and
    services.But that strategy has yet to pay dividends businesses scale
    back purchases during the recession.”If you look at the enterprise
    market right now people are not buying in this category, unless there
    is some compelling (reason),” Lexmark Chief Executive Paul Curlander
    said in an interview with Reuters.Despite the overall malaise,
    Curlander said the company gained market share in the quarter with
    laser printers priced around $100-$200 and related services. Sales also
    improved in sales of high-end inkjet printers in the United
    States.Overall second-quarter net income fell to $17 million, or 22
    cents a share, from $83.7 million, or 89 cents a share. It was the
    company’s fourth consecutive quarterly decline in profit.Excluding
    restructuring costs, the profit was 55 cents a share, lower than the
    profit of 60 cents-per-share profit analysts had expected, according to
    Reuters Estimates. However, it was in line with the company’s own
    target of 50 cents to 60 cents a share.

    fell about 21 percent to $904.6 million in the period, from $1.14
    billion, including a 25 percent decline in Europe. Analyst on average
    were looking for revenue of some $915.8 million.The company said
    revenue for high-margin laser and inkjet supplies such as ink and toner
    slipped 18 percent. Revenue for hardware — which often are sold at a
    loss to the company — fell 29 percent from one year ago.After the
    results were released, Standard & Poor’s Equity Research analyst
    Tom Smith cut his view on Lexmark’s shares to “hold” from “buy,” and
    cut his price target. He projects that the printer industry slowdown
    will last into 2010.Lexmark, whose rivals include Canon Inc and
    Hewlett-Packard Co said it sees third- quarter revenue down slightly
    from the second quarter, with its earnings per share excluding special
    items at 40 cents to 50 cents.”Lexmark’s results are not indicating any
    improvement in the core business,” analyst Shannon Cross of Cross
    Research said in a note to clients.Wall Street analysts had expected a
    profit of 52 cents a share.Its shares fell to $15.11, or about $3.65 in
    morning trading on the New York Stock Exchange, where it was the
    biggest percentage loser.