Lexmark sees ink-jet cartridges sales drop

Quarterly net income has fallen for printer and printer cartridges manufacturer Lexmark with this being attributed to a decrease in income from the sales of ink-jet cartridges.

The overall fall in sales of ink-jet cartridges hit Lexmark along with the aggressive pricing tactics being employed by the firm in the marketplace in terms of its hardware, profits from which were found to have slipped.

As well as higher than expected costs affecting the firm, Lexmark also concluded that lower-margin printers were not selling as well as previously, resulting in net income for the second-quarter of 2007 dropping by 16 per cent compared to the previous quarter.

Chief executive officer Paul Curlander told CNN: "The shortfall was all on the consumer side. It’s getting more expensive for us to place products at retailers, so we are working on ways to minimize our losses."

Ink-jet cartridges are a highly lucrative aspect of Lexmark’s business due to it and many other manufacturers selling printers at a loss and then attempting to recoup the money on the cartridges.

So that it can consolidate and then improve in the long-term, Lexmark is expecting to see further sales decreases of ink-jet cartridges into the third-quarter.

Aside from ink-jet cartridges, Mr Curlander explained that Lexmark would be looking into focusing on wireless printers so that the company can "create a new category here that can invigorate our growth".

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