Lexmark dips out of inkjet business

The printer maker is not the first to leave its legacy behind as times get tough.

By InvestorPlace Aug 28, 2012 11:56AM
By Alyssa Oursler

When printer maker Lexmark (LXK) saw revenue from its inkjet hardware business fall 66% in the first half of the year, the solution became pretty simple: pull the plug.

 

And that's exactly what Lexmark has announced plans to do, focusing instead on its more profitable imaging and software. The restructuring is expected to reduce costs by $85 million next year and as much as $95 million annually in three years, Reuters reports.

 

Some of those savings, though, will come from the 1,700 jobs that will be cut in the wake of its struggles -- cuts that come on top of more than 600 layoffs near the start of the year.

 

But Lexmark is far from the only one facing printing struggles. Eastman Kodak (EKDKQ) also dipped out of the inkjet business this year, and then it dipped out of the traditional print-film business that helped make it a blue-chip company. 


The changes at both companies will mean a greater emphasis on the commercial market and less dependence on the consumer side. For Lexmark and Kodak, they mean eliminating a product that once brought them to prominence.


When times are tough and technology is changing, though, many companies may feel like they have no other choice than to make some changes. Printers specifically are often one of the first things to go when companies need to cut costs, and laser printers tend to be preferred over inkjet as well.


Lexmark, for one, has seen year-to-date losses of 40%, while Kodak is even worse at 60% in the red.

 

The carnage doesn't end there. Hewlett-Packard (HPQ) has seen printer sales fall on top of its many other struggles, while Xerox (XRX) and Canon (CAJ) also announced lowered outlooks of late.


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1Comment
Aug 28, 2012 3:12PM
avatar

Alyssa, you have an error. Kodak did not announce it was leaving the Consumer Inkjet printer market.

While Kodak announced  that it was initiating a sales process for its traditional film and paper business another photo imaging  businesses, the company specifically stated  that it will continue to own and operates its consumer inkjet business.

 

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