Lexmark International Inc. fell as much as 15 percent after the company said second-quarter sales and profit will be lower than the printer maker had expected due to weak demand in Europe and unfavorable exchange rates.
Shares of Lexmark dropped as low as $20.75 in early trading, after decreasing 7.5 percent to $24.31 at the close in New York yesterday. The shares had lost 26 percent this year.
Lexmark joins a lengthening roster of technology vendors -- including Applied Materials Inc. and Advanced Micro Devices Inc. -- 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 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 to give an update for the full year on July 24.
The shares fell the most 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 from equalweight and reduced his price estimate to $24 from $29.