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 user 2005-07-27 at 11:42:00 am Views: 96
  • #12010
    Lexmark profit falls, sets job cuts
    Printer maker says results hurt by tax-related costs, will cut 275 jobs; 3Q outlook below forecasts.
    July 05NEW YORK  – Computer printer maker Lexmark International Inc. said Tuesday that second-quarter profit fell sharply, hurt by tax-related costs, and said it has plans to cut 275 jobs to trim costs.
    Lexmark (down $8.37 to $60.18) also provided a third-quarter outlook that was short of Wall Street forecasts, and its stock fell 2 percent.

    Lexington, Kentucky-based Lexmark, which supplies printers to Dell Inc. and competes with Hewlett-Packard Co. (down $0.11 to $24.19), posted net income of $79.9 million, or 64 cents a share, down from $136.6 million, or $1.02 a share, a year before.

    Excluding a tax cost of $53 million from the repatriation of foreign earnings, the quarterly profit was $1.06, which matched Wall Street analysts’ expectations, according to Reuters Estimates.

    Second-quarter revenue rose 3 percent to $1.28 billion compared to $1.25 billion, driven by 9 percent growth of laser and inkjet supplies revenue, but fell short of the $1.33 billion that had been expected by analysts.

    Lexmark said it plans to reduce its work force by about 275 employees through the first half of 2006, with a majority of those affected exiting in the third quarter of 2005. Lexmark ended 2004 with 13,400 employees.

    As a result of the cuts, the company expects to take charges of about $26 million pretax, with some $13 million to be recorded in the third quarter.

    In preopening dealings, Lexmark shares fell 2 percent to $67 on the Inet system from Monday’s close of $68.55 on the New York Stock Exchange