LEXMARK 2Q PROFIT DECLINES 80%

[Anonymous]

http://www.reuters.com/article/earningsSeason/idUSN2119087820090721
LEXMARK 2Q PROFIT DECLINES 80%
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
NEW
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.

REVENUE DROPS, S&P CUTS
Revenue
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.

[Author]

July 24, 2009 at 1:46 PM