LEXMARK EXECS ANSWER QUESTIONS………..

[Anonymous]

Lexmark execs answer analysts’ questions
Lexmark International hosted its annual Analyst Day yesterday, attracting about 75 to a day of speeches by executives who emphasized the company’s strong past performance but reiterated that it has more work to do.
In the afternoon, analysts peppered an assembled group of executives with questions, many regarding the company’s recent quarter, in which its earnings were 59 cents per share, down from initial estimates of 95 cents to $1.05. Here are some highlights:
Executives said Lexmark currently has relatively weak shares in some of the industry’s fastest-growing segments, such as color lasers and photo all-in-one units.
CEO Paul Curlander: “We need to get into these growth segments with a better penetration … What you saw is that in the key growth segments, we don’t have the kind of penetration or market share that we need. And so we’re kind of out of alignment of where the growth is going on in the market right now. This is a problem, so we need to work on it. That’s why we’re focused on doing investments.”
One analyst asked how soon Lexmark’s product offerings would be where executives desired.
Curlander: “It is very hard to put a time frame on it. But I wouldn’t want to mislead you to think it’s a one-year type of thing. We think this is going to be a multiple year (progression).”
Several analysts asked about Lexmark’s relationship with Dell, for whom it is one of four companies that produce printers that are sold under Dell’s name. Dell constituted more than 10 percent of Lexmark’s revenues in 2004. One analyst asked what the effect would be if Dell relied more on its other suppliers.
Curlander: “We look at OEM (original-equipment manufacturer) as an incremental opportunity. We do it if it makes business sense … If it were just cannibalizing what we otherwise would get, we wouldn’t do it … It lasts as long as it lasts.”
Analysts also asked about the threat posed by companies that sell replacement ink cartridges for the company’s products.
Consumer Printer Division President Najib Bahous: (Remanufactured) ink cartridges have existed … everywhere around the world. … We measure it, we understand it, and we basically contain it … We haven’t seen it increase significantly, but it’s there.”

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November 23, 2005 at 10:35 AM