Weak Printer and Supplies Sales Drag on Lexmark Revenues

Lexmark (NYSE: LXK) announced this morning a first-quarter revenue decline of 20 percent compared with the same period last year, citing weak global economic conditions as they relate to demand for both printers and supplies.

First-quarter revenue fell to $944 million, compared with revenue of $1.18 billion during the same period last year. The company also announced continued restructuring with the closing of the Juarez, Mexico, ink-jet cartridge manufacturing facility due to be completed by March of 2010. It is reported that 270 positions will be eliminated in Juarez and an additional 90 positions will be eliminated worldwide. These employment reductions are in addition to the 375 announced in January 2009.

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"During the quarter we made good progress on our cost and expense reduction initiatives,” said Paul Curlander, chairman and CEO, in a prepared statement. “Key strategic milestones during the quarter include the significant expansion of our laser line, particularly in laser multifunction devices and color, the expansion of our U.S. retail distribution, achieving growth this quarter in our branded high-end ink-jet all-in-ones, and the continuing good growth of our laser multifunction devices."

Lexmark continued to roll out an expanded multifunction and color laser lineup highlighting the recently announced Lexmark X264dn, X360 Series and X460 Series.  Lexmark says these laser MFPs were perfectly suited for the company’s recent expansion into retail stores, including Staples, Office Depot, OfficeMax, InkStop, MicroCenter and Fry's.

Lexmark also said it expects second quarter earnings to mirror the first quarter decline.  Lexmark shares closed at $18.05 yesterday.