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 user 2010-10-27 at 7:04:12 am Views: 50
  • #24216

    good news amid announcement of 21% drop in stock price
    Lexmark executives announced Tuesday its inkjet printers are once again for sale inside Best Buy, the nation’s largest consumer electronics chain. It was good news on a day that was otherwise dominated by the company’s stock price suffering a major fall.While Best Buy has continued to sell Lexmark ink and sold the company’s printers on BestBuy.com, it has not sold them in stores since 2008.”We are excited about Best Buy,” said Paul Rooke, Lexmark’s new CEO and still the leader in the interim of its inkjet printer division. “It’s a better demographic, higher-end customer for us. “That’s what we’re driving for as we reach higher-usage customers.”Rooke told the Herald-Leader the company’s success in office superstores, including Office Depot, Staples and OfficeMax, “helped turn their head.”

    Best Buy is stocking three products: the $99 Impact, $199 Interact and $299 Pinnacle Pro. The company has also started taking pre-orders for Lexmark’s Genesis, an all-in-one set to debut in January that includes a new document-scanning technology that dramatically reduces scanning speeds.”Best Buy is really excited about that,” Rooke said.

    That was the good news in the earnings report for the inkjet division, which saw revenue drop 10 percent year over year. The company had gotten closer to having year-over-year growth in the division, but fell short as the growth in sales of high-end inkjets was more than offset by the decline in sales of low-end units.

    The sales drop-off there contributed to the company falling short of analysts’ expectations of $1.04 billion in sales. Instead, Lexmark grew revenue 6.5 percent year over year to $1.02 billion overall in the quarter.

    Some of the investor sentiment likely also concerned the company’s announcement of the pending retirement of CEO Paul Curlander, who has guided Lexmark out of the recession to revenue growth in each of its past three quarters. The company’s stock shed $10.01, or 21 percent, as it fell to $37.71.

    The company’s stock was also downgraded from “buy” to “hold” by Standard & Poor’s analyst Tom Smith, who noted the company’s lower-than-expected revenue growth.