What’s up with Lexmark?

March 11, 2009

I was in an Industry conference about a year ago and there was a panel of financial analysts that specialized in our industry. They predicted a dark future for Lexmark. At first I was a little skeptical but I watched the news to see if what they said had any merit. After a while I started to see stories on Lexmark. When you begin to string together the following news items things begin to look grim for Lexmark.

Acacia Research, a firm that buys obscure patents, announced it has forced Dell & Lexmark to pay license fees for a patent it owns pertaining to network multifunction printer technology.  The dollar amount was not released.  Other companies that have already settled with Acacia are; HP, Samsung, Oce’, Brother, Epson, Muratec, Okidata, Panasonic & Toshiba.  Acacia reports that its total annual collections are up 45% to $13.8 million per year.

Lexmark warned that its fourth quarter financials would be lower than expected:
– stock shares went down 11%
– restructuring charge of $45 million
– Layoff of 375 jobs
– 17% drop in revenue
– Company started as a spinoff of IBM in 1991
– Stock dropped to $28.35 per share
– Still has 14,000 employees

And now we hear that Standard & Poor’s Ratings Service just lowered its rating on Lexmark to one notch above junk status, or BBB- . Lexmark stock has lost about half its value since peaking at $37.55 last summer.

What does the future hold for the once mighty Lexmark.  From where I am standing it doesn’t look good.

That’s My $0.02
Vince McHugh


One comment

  1. This we can agree on.

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