Oct. 23 (Bloomberg) -- Lexmark International Inc., the second-biggest U.S. printer maker, fell the most in six months in New York trading after profit dropped 47 percent and officials wouldn't give a timeline for a revival in sales.

After growing 12 percent in 2004, Lexmark's revenue fell in the past two years as it lost sales to larger rival Hewlett- Packard Co. Chief Executive Officer Paul Curlander has shifted away from the low-end inkjet business to focus on more expensive devices, such as those that print, scan and fax, as well as laser printers. He refused to say when sales would turn around.

``Our focus is on fixing the inkjet business,'' Curlander said today on a conference call after the Lexington, Kentucky- based company reported third-quarter results. ``We are giving outlooks one quarter at a time.''

The company also said today that it's closing a plant in Mexico and shifting jobs to lower-cost countries. The moves will affect 1,650 positions and cost $90 million in the next two years, while saving the company $40 million in 2008 and $60 million a year thereafter, Lexmark said.

Lexmark shares fell $3.14, or 7.2 percent, to $40.60 at 4:02 p.m. in New York Stock Exchange composite trading, their biggest drop since April. The stock has declined 45 percent this year.

Net income in the third quarter fell to $45.2 million, or 48 cents a share, from $85.6 million, or 85 cents, a year earlier, Lexmark said today in a statement. Revenue fell 3.2 percent to $1.2 billion.

Hardware Sales

Profit beat the 23-cent average estimate of analysts in the Bloomberg survey thanks in part to an 11 percent drop in sales of money-losing hardware, compared with a 1 percent rise in revenue from higher-margin supplies.

``They sold less of something at which they make a significant loss,'' said analyst William Hand, of Bear Stearns & Co. in New York. ``When you are selling less hardware, you are not growing your installed base'' for supplies. He rates Lexmark ``peer perform'' and doesn't own the shares. ``In terms of unit growth, things are not going to get better anytime soon.''

Results also included a benefit of $18 million, or 19 cents a share, from a reduction in the expected tax rate and the finalization of an audit.

Earnings in the fourth quarter will be as much as 60 cents a share, excluding 18 cents related to the job-restructuring costs, Lexmark said. Sales will fall ``in the low- to mid-single digit range'' from last year's $1.37 billion. A 5 percent drop would miss the average estimate of $1.34 billion in the Bloomberg survey.

New Models

Curlander, 54, has added models to challenge Hewlett-Packard and spent more on advertising to promote the Lexmark brand. New wireless products are ``off to a good start'' and will contribute to fourth-quarter growth, he said in an interview.

Lexmark is ``prioritizing markets'' to focus on those where printer use per page is high, creating demand for supplies, he said, declining to say which markets the company had targeted.

In the third quarter, revenue grew 2 percent in Europe, Africa and the Middle East. Sales fell 7 percent in the U.S. and 3 percent elsewhere.

While emerging markets offer the possibility of higher printer sales, customers in those countries print fewer pages per unit and spend less on printing supplies.

(Lexmark held a conference call earlier today to discuss results. Visit http://investor.lexmark.com to listen.)

To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net; Melita Marie Garza in New York at mgarza4@bloomberg.net

Last Updated: October 23, 2007 16:05 EDT