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Tech Industry

Downgrade clips Lexmark shares

Lexmark International shares fell 7 1/4, or 10 percent, to 65 1/2 Wednesday after Bear Stearns cut the maker of computer printers from a "buy" recommendation to "attractive."

Lexmark (NYSE: LXK) shares have been cut in half in the past two months, falling in lockstep with the rest of the technology stock sector.

In March, its shares were perched at a 52-week high of 135 7/8.

Last quarter, Lexmark beat the Street estimates, earning $80 million, or 59 cents a share, on sales of $892 million.

Company officials told Wall Street that it expects stronger revenue growth in the second quarter and that it remains comfortable with analyst estimates for earning and revenue in both the second quarter and full year.

In the first quarter, its gross profit margin declined to 35.3 percent from 36.2 percent due to reduced prices on printers and a mix-shift among products.

Analysts expect it to earn 66 cents a share in the second quarter and $2.86 a share in the fiscal year.

Nine of the 11 analysts following the stock rate it either a "buy" or "strong buy."