By: ws sw
Submitted: 2008-07-28 00:16:44 | Word Count: 627
The Inkjets expected to weigh on earnings
Lexmark(from:http://www.office-products-suppliers.com/d-p12185359-Lexmark_Cartridge/)International will release its second-quarter earnings on Tuesday, and analysts expect the Lexington-based printer maker to continue its well-publicized struggles stemming from its inkjet printer division.
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Since late 2005, that division has struggled as consumers bought printers, which often are sold at a loss, but failed to purchase enough ink cartridges over time to meet Lexmark's profit expectations. The company withdrew from 20 percent of its inkjet sales in 2006 and then announced last October that it would drop another 30 percent of sales in hopes of finding the most profitable customers.
Along with those announcements were restructurings that closed plant(from: http://www.office-products-suppliers.com/buy-plant/)s, eliminated employees and transferred thousands of jobs to lower-wage countries.
”It's even money if they'll announce another restructuring next year,“ said Tom Carpenter, vice president and senior equity analyst at Hilliard Lyons in Louisville.
”At this point, it's tough to see inkjet surviving,“ he said, pointing to Lexmark's decision to walk away from such a high percentage of its business.
”Can inkjet survive when you're walking away from 30 to 40 percent of your business?“ Carpenter said. ”After a while, that's going to catch up to you.“
The company(from: http://www.office-products-suppliers.com/Companies/)'s laser printer division has performed better but has come under increasing scrutiny because of expenses. The segment saw its revenue increase 3 percent year-over-year in 2006, and 5 percent year-over-year in 2007. But when excluding certain restructuring charges, the division's operating income – its profit – fell 5 percent and 2 percent, respectively, in those years. Executives have said the division's expenses have increased because of a strong investment in research and development, as well as spending for a larger sales force.
”Given the overall economy, laser growth is likely to be tepid“ in the second quarter, Carpenter said last week.
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The Inkjets expected to weigh on earnings
Lexmark(from:http://www.office-products-suppliers.com/d-p12185359-Lexmark_Cartridge/)International will release its second-quarter earnings on Tuesday, and analysts expect the Lexington-based printer maker to continue its well-publicized struggles stemming from its inkjet printer division.
Since late 2005, that division has struggled as consumers bought printers, which often are sold at a loss, but failed to purchase enough ink cartridges over time to meet Lexmark's profit expectations. The company withdrew from 20 percent of its inkjet sales in 2006 and then announced last October that it would drop another 30 percent of sales in hopes of finding the most profitable customers.
”It's even money if they'll announce another restructuring next year,“ said Tom Carpenter, vice president and senior equity analyst at Hilliard Lyons in Louisville.
”At this point, it's tough to see inkjet surviving,“ he said, pointing to Lexmark's decision to walk away from such a high percentage of its business.
”Can inkjet survive when you're walking away from 30 to 40 percent of your business?“ Carpenter said. ”After a while, that's going to catch up to you.“
The company(from: http://www.office-products-suppliers.com/Companies/)'s laser printer division has performed better but has come under increasing scrutiny because of expenses. The segment saw its revenue increase 3 percent year-over-year in 2006, and 5 percent year-over-year in 2007. But when excluding certain restructuring charges, the division's operating income – its profit – fell 5 percent and 2 percent, respectively, in those years. Executives have said the division's expenses have increased because of a strong investment in research and development, as well as spending for a larger sales force.
”Given the overall economy, laser growth is likely to be tepid“ in the second quarter, Carpenter said last week.
Welcome the office-products-supplier.com to buy the best office products & supplies. It makes your business easier.
