LEXMARK EARNINGS DOWN 11% , TO UP INK & TONER PRICES

[Anonymous]

http://blogs.barrons.com/techtraderdaily/2008/10/22/lexmark-ups-ink-toner-prices-citi-turns-bullish/
Lexmark Ups Ink, Toner Prices; Citi Turns Bullish
Lexmark
(LXK) shares are on the mend this morning after Citigroup’s Richard
Gardner upped his rating on the stock to Buy from Hold. His price
target on the shares is $37, which is actually down a buck from $38.

Gardner
notes that the company has announced plans to follow Hewlett-Packard
(HPQ) and raise prices on ink and toner by about 5%, a move which he
says should have a significant positive impact on 2009 EPS. He says
that while the inkjet business is “permanently impaired,” the company
is executing well in laser printers, earning 15%-20% operating margins
in that segment. Valuation, at 4x forward operating earnings ex net
cash, “is extremely compelling,” he contends.Gardner trimmed his ‘08
EPS estimate to $3.85 from $3.91, but he upped ‘09 to $4 from $3.57.LXK
today is up 55 cents, or 2.1%, to $26.26.

http://www.marketwatch.com/news/story/lexmark-internationals-quarterly-net-earnings/story.aspx?guid={F146A52B-9D0A-4F65-88C2-51C309D98825}&dist=msr_10
Lexmark shares fall 11% as earnings disappoint
SAN
FRANCISCO — Lexmark International Inc. shares fell more than 11%
Tuesday after the printing and imaging company reported a 19% drop in
its third-quarter earnings and said business is likely to remain
challenging in light of economic conditions through the fourth quarter.

LXK
26.66, +0.15, +0.6%) shares ended the day down $3.28 to $25.71 after
the company said it earned $36.6 million, or 42 cents a share, down
from $45.2 million, or 48 cents, earned in the same period during
2007.Excluding restructuring charges and other one-time items, Lexmark
said it would have earned 63 cents a share. By that measure, the
company met the estimate of analysts surveyed by FactSet
Research.Lexmark’s reported revenue of $1.13 billion, down slightly
from the nearly $1.2 billion it reported a year ago.In a statement,
Lexmark Chief Executive Paul Curlander said the company was facing “a
more difficult global economic environment,” but that Lexmark remains
focused on its strategy of targeting higher usage segments of the
printing market.

Lexmark said that during its third quarter, its
business segment revenue rose 4% from a year ago to $760 million, but
consumer sales dropped by 21% to $371 million. The company said the
consumer segment declines were due primarily to a shift in business
strategies and a slowdown in the inkjet market.For its fourth quarter,
Lexmark estimates earnings, excluding one-time items of between 70
cents and 80 cents a share, while Wall Street analysts have forecast a
profit of 82 cents a share.The company’s estimate excludes
restructuring charges pegged at about 30 cents a share.Lexmark also
forecast that revenue for the current quarter will de down from last
year at a percentage rate in the “low-to-mid teens.

[Author]

October 23, 2008 at 10:46 AM