Toner News Mobile › Forums › Latest Industry News › *NEWS*LEXMARK REVENUE DROPS ON WEAK SALES
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AnonymousInactiveLexmark qtr profit, outlook miss expectations
NEW
YORK, April 07- Computer printer maker Lexmark International Inc. said
on Tuesday quarterly profit rose 7 percent but the results and its
outlook missed Wall Street expectations, sending shares down 4
percent.Sales of equipment Lexmark made for other brands continued to
be weak in the first quarter, which also saw a decline in sales of
inkjet supplies, and aggressive hardware pricing in the laser and
inkjet markets, the company said.It said net income for the quarter
rose to $92.4 million, or 95 cents a share, from $86.2 million, or 78
cents a share, a year earlier.Excluding one-time costs for
restructuring, profit per share was 96 cents, missing the average $1.03
forecast by analysts, according to Reuters Estimates.
Revenue fell 1
percent to $1.261 billion, in line with the $1.26 billion forecast by
Wall Street according to Reuters Estimates.Under pressure to improve
its results, Lexmark last year said it would reduce sales of
unprofitable inkjet printers, a move that some analysts have said would
shrink the number of its printers on the market and cut into profitable
sales of supplies.Lexmark forecast on Tuesday second-quarter revenue to
fall in the low- to mid-single digit percentage range year over year,
and estimated earnings per share to be in the range of 82 cents to 92
cents.Analysts were looking for second-quarter revenue to rise less
than 1 percent to $1.23 billion, and forecast net profit per share at
95 cents, or $1 excluding items.Lexmark shares, which have declined
about 17 percent so far this year, fell to $59.50 in light pre-market
trading from their New York Stock Exchange close on Monday of $62.01
Lexmark Revenue Drops On Pricing, Weak OEM Sales
Document
hardware company Lexmark on Tuesday reported a 1-percent drop in sales
for its first quarter compared to the year-ago period, and missed
analysts’ forecasts by a wide margin. The company said its sales to OEM
customers remained weak and its consumer business suffered a
double-digit decline in the first quarter of 2007.It also offered an
outlook for the second quarter that was significantly lower than many
analysts had been expecting.The Lexington, Kentucky-based company
turned in sales of $1.261 billion, in line with analysts estimates, but
earnings of $92.4 million, or 95 cents per share. The average of
analysts’ forecasts was $1.03 per share, according to Thomson
Financial, while Lexmark had earlier said it expected earnings of
between 90 cents per share and $1.00 per share for the quarter.For the year-ago quarter, Lexmark reported sales of $1.275 billion and earnings of $86.2 million.
Paul Curlander, Lexmark’s chairman and CEO, described the company’s first quarter as “mixed.”
“Among
the factors affecting our results were some strong positives, some
challenges and some investments we believe are necessary to continue to
strengthen our competitive position and to position us for longterm
growth,” Curlander said in a prepared statement. He said that Lexmark’s
sales of its branded products in color laser printers and MFPs were
strong during the quarter, and its core business market sales — which
are largely driven by the channel — were good as well.”Challenges
included OEM unit sales that continued to be weak, declines in inkjet
supplies sales, and hardware pricing that was fairly aggressive in both
laser and inkjet markets,” Curlander said. He noted the company would
continue to make investments in rsearch and development, as well as in
its own brand.Curlander also said aggressive hardware pricing also took a bite out of the company’s results.
Lexmark
has continued to be hurt by its OEM sales to Dell, the Round Rock,
Texas-based direct PC maker, which declined in 2006 as Dell itself
slumped. The company has also declined to say how it is being affected
by a decision by IBM, another longtime OEM customer, to exit the
printer business by transferring its InfoPrint operations to a joint
venture with Lexmark rival Ricoh.In addition to its earnings, Lexmark
also announced several new color multi-function products and lower-end
wireless printers for the consumer segment.Looking ahead, Lexmark said
it expected its second-quarter earnings to range between 82 cents per
share and 92 cents per share. The average of analysts’ forecasts had
been $1.00, according to Thomson Financial.Lexmark was expected to
explain its operations in greater detail during a morning conference
call. -
AuthorApril 24, 2007 at 12:03 PM
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