Lexmark Cutting 275 Jobs

Lexmark (LXK Quote - Cramer on LXK - Stock Picks) matched Wall Street's estimates with its second-quarter profit and set plans to eliminate 275 jobs in an ongoing cost-cutting push.

The Lexington, Ky., maker of PC printers said third-quarter earnings would be in line with analysts' expectations, excluding the costs of the latest round of layoffs.

For its second quarter ended June 30, Lexmark made $80 million, or 64 cents a share, down from the year-ago $137 million, or $1.02 a share. Excluding a charge related to the company's repatriation of overseas profits under the American Jobs Creation Act, latest-quarter earnings were $1.06 a share, matching the Thomson First Call estimate.

Sales rose 3% from a year ago to $1.28 billion, driven by a 9% gain in supplies revenue. Analysts had forecast second-quarter revenue of $1.33 billion.

"Despite difficult market conditions that impacted our revenue growth, we grew laser and inkjet units each at a double-digit rate in the second quarter," said CEO Paul J. Curlander. "We also increased our cash generation in the quarter to $146 million which again demonstrates the strength of our business model."

Gross margin slipped to 34.6% from 35.3% as product margins slipped. For the third quarter, Lexmark said it would make around $1 a share, including costs related to the job cuts. The company pegged those costs at 8 cents a share. Analysts surveyed by Thomson First Call had forecast a third-quarter profit of $1.06 a share.