OEM’s printer shares and sales in decline, blamed on increasing use of mobile devices.
Lexmark has suffered a 21 percent fall in shares and 7.5 percent decline in stock this year, reports Bloomberg, with further decline in sales and profit expected for the second quarter of 2012 as former major shareholder Barclays downgrades shares.
Bloomberg Businessweek reports that the company’s sales declined by around 12 percent in June, resulting in figures below the company’s prediction of sales declines of seven to nine percent forecasted in April. Profit is expected to be between 53 to 55 cents per share, also below the company’s previous forecast of 65 to 75 cents per share.
Lexmark’s shares were downgraded by 7.3 percent at $24.40 (€20), as Barclays Capital’s Ben Reitzes cut his rating on the shares from Equal Weight to Underweight and reduced his price target from $29 (€24) to $24 (€19), reports Barron’s.
Reitzes commented on the negative impacts that mobile devices are having on printer manufacturers like Lexmark, with HP and Xerox also experiencing difficulties. “Younger workers may not be printing as much given different work habits and higher adoption rates of mobile devices,” he said, adding that “Corporations are more acutely aware of printing costs.” This represents a significant shift from Barclay’s Capital, which has a history of being one of the OEM’s former largest shareholders.
In addition to the decreasing demand for printers due to mobile devices, the rise of MPS and unfavourable exchange-rate fluctuations are also being held responsible for the losses, with Lexmark stating that “[the] outlook reflects a weaker-than-expected demand environment, particularly in Europe, and a larger-than-expected impact from unfavourable changes in currency exchange rates.”
The Recycler has previously reported on the impact of mobile devices on the printer industry, with increasing use of smartphones and tablets also being partially blamed for declines in India’s printer market.