Big gains came despite setbacks

Lexington-based printer maker Lexmark International saw sales grow higher than expected in its second quarter, but the company recently said they would have been even better if not for factors including the decline in the value of the euro and a shortage in components for laser printers.

In discussing the recent results with industry analysts, executives said the euro, which weakened about 6 percent on average in the second quarter compared with a year earlier, significantly affected growth in its European markets.

Overall, the company's revenue in Europe grew about 8 percent to $369 million, but that was compared with growth of 31 percent in the company's other international markets, Lexmark's chief financial officer, John Gamble Jr., said.

"The underlying fact is that we do have a very robust business in Europe ... and movements in those currencies certainly affect our revenue," Gamble told the Herald-Leader. "What we're focused on doing is making sure ... we continue to compete effectively regardless of what the currency does."

Component shortage

Revenue from the sale of laser printers grew 36 percent, but CEO Paul Curlander told industry analysts that the number was dragged down by a continuing printer-component shortage.

"Our supply-chain team has to go out there and every day chase components," Curlander said.

Gamble added that the company has been dealing with the problem by using the components it can obtain in its laser printers that are sold for workgroups instead of low-end lasers that are used less.

"On the workgroup end, those are sales we go after very aggressively," Gamble said.

And even though Lexmark has been sending the components it receives to workgroup lasers, "we could have sold more (of those) if we had more products," Curlander said.

Restructuring change

Company executives have told analysts that its restructuring announced last October will cost less than expected because it is deferring a project that would have seen it relocate an unspecified foreign manufacturing facility of laser toner.

"Effectively, because our (sales) volume is so much higher than we expected last October, we haven't been able to execute that," Gamble said. "We're still going to end up at the same place at the end of the day; we'll just get there a different day."

Executive promotion

The company's board of directors recently promoted Marty Canning, the head of Lexmark's laser-printer division since July 2007, from vice president to executive vice president.

The move offers him the same executive vice president title as Paul Rooke, who preceded Canning as head of the laser division and now leads the inkjet division.

Canning will continue to lead the laser division.

"Under Marty's leadership, (laser) has expanded its product line and path to market, while also increasing market share in key categories," CEO Paul Curlander said in a statement. "His insights and experience will be very important in helping Lexmark grow in the coming years."