Lexmark Will Cut 8% of Its Work Force

Lexmark International Inc., the second-biggest maker of inkjet and laser printers, said it will cut 900 jobs, or about 8% of its work force, and move some manufacturing to Mexico and China to reduce costs. The company also reported third-quarter earnings that exceeded revised forecasts. Lexmark’s profit fell 14% to $66.1 million, or 50 cents a share, on a 9.7% rise in revenue to $926.6 million. Analysts surveyed by First Call/Thomson Financial had expected 47 cents on average. The estimate was cut from 60 cents after Lexmark lowered its profit forecast Sept. 26, blaming retailers it said aren’t stocking up on inkjet cartridges and the effect of currency exchange. About 35% of Lexmark’s sales come from Europe, and the company said the euro’s decline against the dollar reduced third-quarter revenue by 15%. Spokesman Tim King said most of the job cuts will be made at the company’s plant in Lexington, Ky., also its headquarters. Lexmark expects to take a fourth-quarter charge of $35 million to $45 million before taxes to cover a reorganization after the job cuts, which it forecasts should result in annual savings of $100 million by the end of 2002. Lexmark expects fourth-quarter earnings of 55 cents to 65 cents a share, with sales growth in the range of 10% to 15% from a year earlier. It had net income of $99.7 million, or 73 cents a share, in its fourth quarter of 1999. Lexmark’s stock, which dropped to a 52-week low of $28.75 last week, surged $5.56 to close at $35.06 on the New York Stock Exchange.