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 user 2007-04-24 at 12:03:00 pm Views: 59
  • #17897

    Lexmark qtr profit, outlook miss expectations
    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

    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.”
    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.
    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