LEXMARK:CHANNEL INVESTMENTS PAYING OFF

[Anonymous]

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.”

[Author]

September 10, 2007 at 10:12 AM