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 user 2010-02-15 at 10:20:56 am Views: 44
  • #23513

    Computer maker Dell
    remained the top customer of Lexington-based printermaker Lexmark
    International in 2009.Dell accounted for 12 percent of Lexmark’s revenue
    in 2009 and was the only customer generating 10 percent or more of
    revenue, Lexmark chief financial officer John Gamble Jr. told analysts
    during the company’s recent fourth-quarter earnings call.Lexmark
    manufactures printers for Dell, which then sells them under the Dell
    brand.Dell accounted for 13 percent of revenue in 2008 and 15 percent in
    2005, 2006 and 2007.

    Laser hardware issues

    CEO Paul
    Curlander told analysts during the company’s recent earnings call that
    sales of laser printers have been curtailed by issues including
    component shortages.Curlander said those shortages along with
    higher-than-expected demand and longer lead times from suppliers have
    slowed Lexmark in fulfilling demand.He said demand for certain parts has
    been higher than expected across the overall technology industry,
    causing the parts shortages.”We’re very focused on trying to catch that
    up …” he said. “Clearly it’s going to be some time in the first half
    of 2010 before we get to where we’d like to be.”

    No stock

    For the first time in years, Lexmark did not
    repurchase any of its outstanding stock in 2009.The company had been
    aggressively buying back stock in recent years, including spending more
    than $1 billion in 2005 to buy 17 million shares.The company has slowed
    its purchases in recent quarters as much of its cash is overseas, and it
    would have to pay a certain amount to be able to bring it back to the
    United States to fund share repurchases.The company has billed the
    program as a way to return value to shareholders, but some analysts have
    been skeptical.”Thankfully most of the cash is overseas, making it less
    likely for Lexmark to do its historical shareholder unfriendly
    repurchase plans,” said Tom Carpenter, vice president and senior equity
    analyst at Hilliard Lyons in Louisville.

    Deal inked with LG
    has signed an agreement with electronics powerhouse LG to produce
    inkjet and laser printers to be sold under the LG name in South
    Korea.The deal is for that country only, though it is one of the top 10
    PC markets in the world, noted Lexmark spokesman Jerry Grasso.

    hailed by critics

    Lexmark has been calling attention to the
    praise bestowed upon its recent laser and inkjet printer lines by
    critics.In an internal assessment released during the earnings period,
    Lexmark announced its laser printers won more than three times as many
    laser awards in the United States last year as its competitors. The
    company says it also received 28 percent of the U.S. industry inkjet
    awards, coming in second among top manufacturers.It’s “strong
    recognition of the evolution of our inkjets over the past two years,”
    Grasso said.