Lexmark, the Kentucky-based printer company yesterday filed a 21% drop in revenues for the three months to 30 June as profits tumbled nearly 80% to $17m. Hardware and supplies sales fell 29% and 18% respectively.
Lexmark blamed poor demand due to the economy, lower pricing and the negative currency impact for the drop in fortunes. The company cut operating expenses in a year from $316m to $253m, excluding restructuring charges.
Many analysts have predicted an upturn in equipment sales in 2010 but CEO Paul Curlander said he did not believe this signalled recovery in the printer market.
"Over the last five or six year we have become much more uncoupled from PCs. As I look at the distributed printer market, PCs over the last few quarters have done much better," said Paul Curlander.
This was true of the corporate enterprise where customers wanted a compelling cost reduction story before considering "any type of upgrade or change in their distributed environment" and the same could be said about inkjets and SMEs, Curlander said.
For resellers wondering if the market is on the up, Curlander said: "I don't think we have seen anything in the second quarter that would say we are at a cyclical bottom."
"Relative to supplies geographically, we did see a little bit of a deceleration internationally, particularly in Europe, in the second quarter."
Lexmark is forecasting a sequential decline in supplies revenues.