Monday, July 09, 2007

Lexmark warns

On a mostly-up morning for the markets starting out the new week, Lexmark (NYSE LXK) has issued a warning that their second quarter numbers due out July 24th will disappoint. Their stock has responded with a 9% drop to below $45 less than an hour into the trading day, and even print leader HP (NYSE HPQ) is weaker, down 1.3% at $45.38. LXK's release attributes the revenues/earnings problem to "the usual suspects" (my emphasis added), all except for that last one -- I'm not sure what that means.
This shortfall is primarily due to less than expected inkjet supplies revenue, lower hardware average unit revenue driven by aggressive pricing and promotion, some greater than expected product costs, and greater than expected branded inkjet unit growth(?).

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