Lexmark prospers, but CEO frets

Printer company Lexmark has announced record first-quarter revenue of US672 million, up 15% on last year's Q1 revenue of $US583 million, but the Asian crisis is giving cause for caution. Despite income being up 40% to $US78 million over last year's first-quarter figure of $US56 million, with revenue from printers and supplies increasing 22% over a year ago - this sector contributed 83% of Lexmark's total revenue, increasing from 78% over Q1 1997 - Lexmark CEO Marvin Mann expects the year ahead to offer challenges.

Printer company Lexmark has announced record first-quarter revenue of US672 million, up 15% on last year's Q1 revenue of $US583 million, but the Asian crisis is giving cause for caution.

Despite income being up 40% to $US78 million over last year's first-quarter figure of $US56 million, with revenue from printers and supplies increasing 22% over a year ago - this sector contributed 83% of Lexmark's total revenue, increasing from 78% over Q1 1997 - Lexmark CEO Marvin Mann expects the year ahead to offer challenges.

Mann says the strong growth was driven by volume increases in network laser printers and colour inkjets, and even stronger growth in associatedsupplies. "Our first-quarter results reflect strong growth across the business and in each geographical region except Asia-Pacific," says Mann. Lexmark is expecting good results in the second quarter but "a more difficult comparison" with last year's results in the second half of the year, says Mann.

Jim Upward, general manager for Lexmark agent OEM Distributors, echoes the"cautious" slant on sales expectations for this year, but speaks of an "underlying optimism".

He suspects most of Mann's reserve about the Asia-Pacific region relates to the economic instability in Asia and the devaluation of regional currencies in comparison to the US dollar, noting the 25%+ downward movement of the New Zealand dollar over the past year.

These factors make it harder for distributors to sell products at a price. "We are suffering the pressure of a quieter economy and the market we trade in," says Upward.

He says, however, that OEM is ahead of its sales targets and the organisation is a "printer solutions company", not just a printer vendor, and the company is "looking at alternative strategies" to maintain its levels of growth. Lexmark has about 7% of the total printer market in New Zealand, excluding basic graphics device printers.

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