Lexmark Printer sales Plummet
Lexmark International Inc. said on Tuesday its first-quarter laser and inkjet printer sales declined and forecast further revenue softness, sending its shares down almost 12 percent.
The larger-than-expected 42 percent drop in inkjet printer sales overshadowed stronger sales of laser printer supplies and an overall first-quarter profit that beat expectations.
First-quarter net income rose to $101.7 million, or $1.07 a share, from $92.4 million, or 95 cents a share, a year ago. Excluding restructuring costs, per-share profit was $1.16.
Analysts had expected a profit of 89 cents a share.
Lexmark and its rivals typically sell low-end inkjet printers at a loss, hoping for long-term sales of more profitable replacement supplies such as toner. Lexmark has responded to shrinking profits by shifting its consumer focus to higher-priced units and customers who print more.
Lexmark has been cutting costs and trimming prices in an effort to better compete with rivals such as Hewlett-Packard Co and Canon Inc. In October, it said it would consolidate operations in Mexico, including closing a plant and moving some 1,650 jobs to lower-cost countries. The restructuring is expected to save $40 million this year.
For the second quarter, supplies revenue are expected to be about flat year to year as continued growth in laser supplies will be offset by a decline in inkjet supplies.
Lexmark expects earnings per share of 65 cents to 75 cents per share, excluding 11 cents a share of restructuring costs. The company sees revenue down in the mid-single digit percentage range from the previous year.
Analysts expect a profit of 76 cents a share in the second quarter.
