Nintendo's New OLED Switch Using Apple Pay Later iOS 16.4: What to Know Awaiting Apple's VR Headset 14 Hidden iPhone Features Signing Up for Google Bard VR Is Revolutionizing Therapy Clean These 9 Household Items Now
Want CNET to notify you of price drops and the latest stories?
No, thank you

Lexmark earnings sag

The printer maker reports lackluster second-quarter earnings and warns that profits for the current quarter will fall short of expectations.

Lexmark International on Monday reported lackluster second-quarter earnings and warned that profits for the current quarter will fall short of expectations.

Shares of the Lexington, Ky.-based printer maker took a beating after the report, with shares recently trading at $59.95, down $13.55 or more than 18 percent.

For the three months ended June 30, Lexmark earned $101.7 million, or 77 cents per share, on revenue of $1.12 billion. That compares with earnings of $89.1 million, or 67 cents per share, on revenue of $1.06 billion in the same quarter a year earlier.

Analysts had been expecting the company to report earnings of 78 cents per share, according to First Call. Lexmark also expressed caution about the second half of the year, projecting that earnings in the current quarter would be between 63 cents per share and 73 cents per share, below Wall Street estimates of around 80 cents per share. The company said sales would increase slightly as compared with last year.

"As we look forward to the third quarter, we believe our extensive corporate and consumer product launches in the second quarter have put us in a good position for the second half of 2003," Lexmark CEO Paul J. Curlander said in a statement. "We continue to be cautious, however, due to softness in corporate and consumer spending, and aggressive pricing competition."

Sales of supplies accounted for $630 million, or 56 percent, of Lexmark's second-quarter revenue. Printer hardware sales were $400 million, up 2 percent from a year ago, but made up a smaller percentage of overall sales than they did last year.

Soleil Securities analyst Shannon Cross said in a research note that Lexmark's supplies revenue was below expectations and the company also had higher-than-anticipated sales and administrative costs, although profit margins came in somewhat higher than expected.

Both No. 1 printer maker Hewlett-Packard and Lexmark lost some market share to rivals during the first quarter, according to market researcher IDC. However, the first quarter numbers didn't show any impact from Dell, which started selling Lexmark-made printers in March.