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 user 2009-07-24 at 1:45:22 pm Views: 56
  • #22616

    Lexmark profit falls, outlook disappoints
    Lexmark Profit Drops 80%, Sees Weaker 3rd Quarter
    * Q2 share $0.22 vs $0.89
    * Q2 rev $904.6 mln vs $1.14 bln
    * Sees Q3 EPS of 40-50 cents vs expectations 52 cts
    * Shares down 19.5 pct

    NEW YORK, July 09 – Lexmark International Inc on Tuesday posted weaker-than-expected quarterly results on poor demand for printers and supplies, and forecast third-quarter profit that fell short of analysts’ views.Lexmark, whose shares fell 19 percent, has been shrinking its focus on lower-end printers as it tries to boost sales to high-volume users who print many pages and use more supplies and services.But that strategy has yet to pay dividends businesses scale back purchases during the recession.”If you look at the enterprise market right now people are not buying in this category, unless there is some compelling (reason),” Lexmark Chief Executive Paul Curlander said in an interview with Reuters.Despite the overall malaise, Curlander said the company gained market share in the quarter with laser printers priced around $100-$200 and related services. Sales also improved in sales of high-end inkjet printers in the United States.Overall second-quarter net income fell to $17 million, or 22 cents a share, from $83.7 million, or 89 cents a share. It was the company’s fourth consecutive quarterly decline in profit.Excluding restructuring costs, the profit was 55 cents a share, lower than the profit of 60 cents-per-share profit analysts had expected, according to Reuters Estimates. However, it was in line with the company’s own target of 50 cents to 60 cents a share.

    Revenue fell about 21 percent to $904.6 million in the period, from $1.14 billion, including a 25 percent decline in Europe. Analyst on average were looking for revenue of some $915.8 million.The company said revenue for high-margin laser and inkjet supplies such as ink and toner slipped 18 percent. Revenue for hardware — which often are sold at a loss to the company — fell 29 percent from one year ago.After the results were released, Standard & Poor’s Equity Research analyst Tom Smith cut his view on Lexmark’s shares to “hold” from “buy,” and cut his price target. He projects that the printer industry slowdown will last into 2010.Lexmark, whose rivals include Canon Inc and Hewlett-Packard Co said it sees third- quarter revenue down slightly from the second quarter, with its earnings per share excluding special items at 40 cents to 50 cents.”Lexmark’s results are not indicating any improvement in the core business,” analyst Shannon Cross of Cross Research said in a note to clients.Wall Street analysts had expected a profit of 52 cents a share.Its shares fell to $15.11, or about $3.65 in morning trading on the New York Stock Exchange, where it was the biggest percentage loser.