Lexmark International Inc. (LXK:US) fell the most in more than a year after saying second-quarter sales and profit would be lower than the printer maker had expected due to weak demand in Europe and unfavorable exchange rates.
Shares of Lexmark dropped 16 percent to $20.36 at the close in New York, for the biggest decline since October 2010. Including yesterday’s 7.5 percent drop, the shares (LXK:US) have lost 38 percent this year.
Lexmark joins a lengthening roster of technology vendors -- including Applied Materials Inc. (AMAT:US) and Advanced Micro Devices Inc. (AMD:US) -- citing the economic slump in Europe for worse-than-expected second-quarter results.
The “outlook reflects a weaker-than-expected demand environment, particularly in Europe, and a larger-than-expected impact from unfavorable changes in currency exchange rates,” Lexmark said.
Sales declined about 12 percent in the June period, Lexington, Kentucky-based Lexmark said yesterday in a statement. That’s greater the 7 percent to 9 percent drop the company had forecast in April. Profit will be 53 cents to 55 cents a share, excluding acquisition- and restructuring-related costs, Lexmark said. The company previously forecast 65 cents to 75 cents.
Analysts on average had predicted that Lexmark would report per-share profit of 99 cents, data (LXK:US) compiled by Bloomberg show. They had projected that sales would fall 8 percent to $959.6 million.
Lexmark said the sales and currency trends would probably affect results in the second half of the year as well. The company plans (LXK:US) to give an update for the full year on July 24.
The shares fell the most (LXK:US) in more than nine months yesterday after Barclays Capital downgraded Lexmark stock, citing a slump in corporate spending as more workers use mobile devices. Benjamin Reitzes, an analyst at Barclays in New York, downgraded the shares to underweight (LXK:US) from equalweight and reduced his price estimate to $24 from $29.
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