Lexmark’s Profits Nosedives in Q4
Lexmark may be making all the positive news for its entire range of new inkjet and laser printers, but the company is coming to terms with the recession with their profits nosediving into deep sea. The past quarter recorded a downfall of 82 percent in the company’s profits and as per the company newsletter, the dip is owed due to restructuring costs and soft sales of computer printers and ink.
The forecasts made by the company analysts are not too bright either. The predictions put a further dip in their profits ranging between 10 to 20 percent from their already dithered profits. This downfall is purely attributed to the recession that has resulted in slowdown in computer and accessory purchases. Even services sector has taken a hit which affects the consumption of ink cartridges of Lexmark.
As a result of reduced profits, Lexmark has increased the prices of its products and consumables which could translate into reduction in sales.
“Lexmark, along with other printer companies, is raising toner and ink prices again. The risk to these moves is that customers will either print less or migrate to aftermarket ink and toner vendors which tend to price at a 20 percent to 30 percent discount,” Cross Research analyst Shannon Cross says.
In sharp contrast, Lexmark’s competitors – HP and Canon have done fairly well in comparison to Lexmark during the same period.
About the author:
Abhinav has been blogging about printing and related technologies on CreativeCloud for several years. He is also a project manager for a large technology company.
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