Things aren’t going as well as expected at computer printer manufacturer Lexmark International as the company tries to move away from lower margin prodcuts.
On Tuesday, the Lexington, Ky.-based firm warned that its fourth-quarter results would be lower than expected thanks to weak sales for computer printers and higher restructuring costs.
Lexmark now thinks its fourth-quarter sales are going to fall about 17.0%; a notch above its previous previous guiadnce that predicted a drop in the low- to mid-teen range.
The drop, the company said, was driven by lower laser- and inkjet-hardware unit sales and currency rate shifts during the quarter. The lower sales number can also, in part, be attributed to the company’s shift in product groups to high-end porducts, from lower-quality printers.
During a call with analysts, Lexmark’s chief executive Paul Curlander said about one-third of the company’s jobs may be outsourced to low cost regions. The 2009 restructuring plan is expected to impact about 375 positions and will result in pre-tax charges of approximately $45.0 million. Restructuring charges in the fourth quarter of 2008 related to the changes were about $20.0 million. Lexmark expects the plan to be “substantially completed” by the end of the year.
Lexmark’s cramps are nothing new. As far back as April, the company began cutting costs and focusing on higher-priced products to combat its struggling sales.
Via: forbes.com