Lexmark International announced its second restructuring this year on Tuesday, saying that it plans to cut 360 jobs, with the bulk coming from the closing of its last inkjet cartridge plant in Mexico.
The announcement came as part of the Lexington printer maker's release of first-quarter earnings, which fell 42 percent from the same period in 2008.
Fueling the decline was a weak performance by the company's laser printer division. That division had been a strong performer for Lexmark in recent years — and the company needed the support as it worked to improve its struggling inkjet division.
But Lexmark, the only Fortune 500 business headquartered in Lexington, has seen demand for its laser printers and toner fall during the past two quarters because of the weakened global economy, the company said.
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Still, earnings were higher than analysts had expected and would have been even higher if not for restructuring costs.
The last quarter in which Lexmark did not have a restructuring charge was the fourth quarter of 2005.
The company's newest restructuring — its sixth in the past five years — consolidates its inkjet cartridge manufacturing in Asia, primarily in the Philippines. Over the past few years, the company has shuttered a plant in Scotland and will now close the last of three in Mexico.
The closing of the inkjet portion of the plant in Juarez — it will still produce laser supplies — will account for 270 of the 360 jobs.
The company declined to say how many of the remaining 90 jobs would be cut from its Lexington headquarters, where it says it will employ about 3,000 going forward.
Among the 14,000 employees worldwide, "90 people is relatively small," spokesman Jerry Grasso said in explaining why the company wouldn't disclose the Lexington impact.
Lexmark is Lexington's second-largest private employer, behind St. Joseph Health System.
Tom Carpenter, vice president and senior equity analyst at Hilliard Lyons in Louisville, said this could be the last restructuring at Lexmark for some time, "given how they've reduced their manufacturing footprint to meet the economic environment."
The company's laser printer division has been stung by the economy in recent quarters.
"Until the fourth quarter (of 2008), laser supplies were growing double digits," Carpenter said of toner sales. "Now the supplies growth is negative. That has a significant impact on Lexmark's profitability."
Lexmark chief executive Paul Curlander told analysts during a morning conference call that the company attributes the decline in laser toner sales to cost cutting and lower employment levels primarily in business accounts.
Chief financial officer John Gamble Jr. said afterward that Lexmark traditionally had seen "very nice growth" in laser toner sales.
"It's difficult to make long-term statements on what's going to happen, but in the short term, we think it's very related to the global economic weakening," he said.
The economy might offer a bright spot. Lexmark has long promoted itself as a company that helps businesses reduce paper use by moving more documents digitally, plus using features such as dual-sided printing.
"For anyone who that didn't resonate with before, it resonates now," Gamble said. "We've got the right message. We've got the right offering."