*NEWS*LEXMARK:INKJETS ARE STILL GOOD BUSS

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*NEWS*LEXMARK:INKJETS ARE STILL GOOD BUSS

 user 2006-06-02 at 11:55:00 am Views: 78
  • #15777

    Lexmark says low-end inkjets are still good business
    As
    Lexmark International withdraws from a significant portion of its
    low-end inkjet printer business, it’s important to note the market is
    still a good one for the company, its chief executive stressed to
    analysts and investors this morning.CEO Paul Curlander addressed that
    and a variety of topics at the Sanford C. Bernstein and Co. Strategic
    Decisions Conference in New York City.The inkjet discussion stemmed
    from the company’s announcement earlier this year that it would
    withdraw from about 20 percent of its inkjet sales, a group that
    includes a number of bundling agreements.The company called some of
    those agreements bad deals, as consumers do not buy enough inkjet
    cartridges and supplies over the products’ lifetimes to offset low
    profit margins on the initial piece of hardware.A question posed to
    Curlander asked whether the company would essentially be competing even
    more intensely with higher-priced inkjets, such as Hewlett-Packard’s
    offerings, by walking away from some of the low-end inkjet business.“I
    think obviously we’d like to be stronger in the above-$100 segment,”
    Curlander said. “But I would tell you that the below-$100 segment is
    not a bad place to be.”Curlander also reiterated that Lexmark is
    focusing on introducing new products in high-growth market segments
    where the company is underrepresented, such as color lasers and 4-in-1
    inkjets.He added the company’s focus is on raising hardware unit
    growth, then increasing hardware revenue growth and supplies
    growth.“It’s going to have to be a progression starting with unit
    growth for us to move back where we really want to be,” he
    said.Curlander also said the company is still executing its
    restructuring program announced earlier this year and “we haven’t
    focused on doing more restructuring than what we’ve already
    announced.”In January, the company announced a plan that would
    eliminate or transfer 1,350 jobs, including up to 200 in Lexington, to
    countries where wages are lower. Lexmark also announced it would freeze
    its U.S. pension plan and begin offering improved 401(k) matching
    contributions.“That’s what we thought was the right amount to do …
    beyond that we’re looking for our investments to grow the business,” he
    said.