Lexmark, the number two maker of inkjet and laser printers, plans to streamline its business in a bid to cut escalating costs.
Lexmark, which was spun off from IBM in 1991, is struggling to contain expenses caused by a production bottleneck and its largest product introduction to date in the shape of its Optra T family of laser printers. The September launch was intended to challenge industry leader, Hewlett-Packard.
The company has also just opened a plant in the Philippines to make inkjet cartridges and is in the process of constructing another plant in Mexico.
But it now plans to discontinue its Imaging Solutions unit, although three operating units will be maintained - the Business Printer Division (BPD), the Consumer Printer Division (CPD) and the newly formed Customer Solutions Division (CSD).
The CSD unit, which will be headed by Thomas Lamb, will combine the firm's after-market supplies business with its ecommerce and small to medium business.
Paul Rooke, the former president of Lexmark's Imaging Solutions unit, will become president of BPD, replacing John Mitchell, who is leaving the company. Bernard Masson will continue as president of CPD.
Paul Curlander, Lexmark's chairman and chief executive, said he believed growth areas in future would include ecommerce and servicing small and medium businesses.
"I am very excited about our newly structured organisation and our streamlined management team. I believe we are properly positioned for future growth," he added.
In the third quarter, the firm's net income rose 32 per cent to $76.5 million on revenue of $848 million. But it expects earnings for the quarter, ending 31 December 1999, to be in the lower half of the $0.66 to $0.80 per share expected by analysts.
Last week, Lexmark's board authorised the buyback of an additional $200 million in common shares, increasing its repurchase authorisation to $1 billion.
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