Lexmark Tumbles After Profit Forecast Misses EstimatesDanielle Muoio
Lexmark International Inc. declined the most in almost five years after reporting a second-quarter loss and forecasting earnings that missed analysts’ estimates.
Lexmark fell 20 percent to $37.75 at the close in New York, the biggest drop since October 2010 and the lowest value for the shares in more than four months.
The printing and imaging company reported a loss of $36.3 million, or 59 cents a share, from a profit of $37.5 million, or 59 cents, a year earlier. Revenue declined 1.4 percent to $879.3 million, missing analysts’ estimates of $901 million.
Lexmark projected earnings in the current quarter, excluding some items, of 51 cents to 61 cents a share compared with analysts’ average estimate of 92 cents. Annual profit is projected in a range of $3.55 to $3.75 a share compared with analysts’ average estimate of $3.78.
The Lexington, Kentucky-based company also said it will cut 500 jobs as part of a 2015 restructuring expected to generate pretax savings of $65 million.
“Despite currency headwinds, we are well positioned to help solve our customer’s unstructured information challenges, as well as attain our goal of $500 million in software revenue and a software operating margin of 25 percent by the end of 2016,” Jerry Grasso, vice president of corporate communications at Lexmark, wrote in an e-mail.
Lexmark said it closed its $954 million acquisition of Kofax Ltd., which produces technologies that converts paper documents into digital images. Lexmark’s shares had increased 16 percent since the purchase was announced March 24 through Monday’s close.
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