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Lexmark shares tumble on tepid forecast
SAN
FRANCISCO – Lexmark International Inc. shares fell as much as 10%
Tuesday after the printing and imaging company warned current quarter
profits would fall despite a 10% rise in first-quarter profit.Lexmark
said that for its second quarter, it expects to earn between 54 cents
and 64 cents a share, down from 67 cents a share in the year-ago
quarter. Lexmark also estimates its sales will be down in the
mid-single digit percentage range from a year ago.Excluding charges and
one-time items, Lexmark estimates it will earn between 65 cents and 75
cents a share.The outlook sent Lexmark’s shares down $3.57 to $31.80.
For
its first-quarter, Lexmark said it earned $101.7 million, or $1.07 a
share, on $1.18 billion in sales for its first quarter, compared to
$92.4 million, or 95 cents a share, on sales of $1.26 billion in the
same period a year ago.Excluding charges and one-time items, Lexmark
would have earned $1.16 a share. Analysts surveyed by Thomson Financial
had forecast Lexmark to earn 90 cents a share.Lexmark has undergone
restructuring efforts over the last year and has tried to focus its
consumer products on high-usage customers. As a result, the company has
shifted away from lower-end inkjet printers and more toward higher-end
all-in-one printers with wireless capability.The shift has helped
Lexmark’s earnings, as gross margins in the first quarter rose to 37.1%
from 33.5% a year ago. Consumer sales, however, fell 17% from last year
to $434 million, while Lexmark’s business segment revenue edged up 1%
to $741 million.
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