Lexmark Shares Dive After Profit Outlook Cut
Printer Maker’s Shares Tumble; Firm Says Forecast Hurt by Weak Demand
NEW YORK (Oct.05) –
Printer-maker Lexmark International Inc. on Tuesday cut its
third-quarter profit estimate by more than half due to an unexpected
decline in revenue. The company’s stock sank nearly 25 percent in early
trading to a new 52-week low.
Lexmark estimated earnings for the quarter will be between 40 cents and
50 cents per share, less than half of previous projections, saying
revenue declined by about 4 percent to 5 percent, instead of rising in
the low single-digit percentages as forecast.
Analysts were expecting the company to post earnings of $1.02 per share
in the third quarter, slightly above the midpoint of Lexmark’s earlier
forecast of between 95 cents and $1.05 per share, on revenue of $1.3
billion, up about 3 percent from a year ago.
The revised outlook was a result of lower revenue from supplies for
laser and inkjet printers, as customers reduced inventory and Lexmark
saw lower demand amid end users. Lexmark also said it experienced
slower demand for laser and inkjet printers, and it priced the printers
more aggressively and increased the use of promotions during the
quarter.
Shares of Lexmark fell $15.18, or 24.9 percent, to $45.76 in early
trading on the New York Stock Exchange, below its previous 52-week low
of $59.50.
Lexmark sells its products through distributors including Ingram Micro
and Tech Data, and through retailers such as CompUSA in the United
States and Carrefour in France.
The company said the same factors should influence fourth-quarter
results, causing revenue and earnings to come in well below the current
estimates of Wall Street analysts. Analysts were looking for earnings
of $1.17 per share, with revenue rising 1 percent to $1.56 billion.
Lexmark plans to release its third-quarter results on October 25.