Lexmark Still Cautious Despite Earnings Growth

Citing increased sales in supplies and hardware, the printer company reports double-digit earnings and revenue growth for the second quarter-but execs say market uncertainty is keeping them guarded.

Printer giant Lexmark International Inc. on Monday reported double-digit earnings and revenue growth for the second quarter of 2004.

The Lexington, Ky., company took in a profit of $136.6 million, or $1.02 per share, on revenue of $1.25 billion, topping its year-ago profit of $101.7 million, or 77 cents a share, on revenue of $1.12 billion.

Profit was driven by a 14 percent growth in sales of supplies and an 11 percent growth in hardware sales, Lexmark chief financial officer Gary Morin said during an earnings conference call.

In the business market, sales of low-end monochrome and color laser printers were stronger than higher-end printers, Morin said.

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Despite an upbeat second-quarter earnings announcement, Lexmark officials were cautious about the third quarter, and Lexmark shares fell more than 7 percent on the day.

"As we look forward to the third quarter, we believe our recent product announcements and our supplies-driven business model position us well for continued growth," Morin said. "However, we continue to be cautious due to the uncertainty in the market and the potential for aggressive price competition."

Lexmark lags behind only Hewlett-Packard Co. in U.S. printer shipments. Lexmark also resells its printers through partners Dell Inc. and IBM.

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