Lexmark Tumbles on Weak Outlook (LXK)

Lexmark International Inc. (NYSE:LXK), on Thursday, said that its second-quarter financial results were negatively impacted by weak sales in Europe and a stronger dollar. Following the announcement, LXK stock fell sharply in trading on Friday.

Lexmark is the latest company in the technology sector to lower its outlook due to weakness in Europe. Earlier this week, chipmakers Advanced Micro Devices Inc. (NYSE:AMD) and Applied Materials Inc. (NASDAQ:AMAT) also lowered their outlooks,.

Lexmark said that its second-quarter revenue dropped about 12%, which is significantly higher-than-anticipated. LXK said that the downward revision reflects weaker-than-expected demand environment, particularly in Europe, and larger-than-expected impact from exchange rate fluctuations.

LXK derives nearly 40% of its revenue from Europe, which is struggling due to ongoing euro zone debt crisis.

The downward revision from Lexmark prompted analysts at Barclays to slash their price target on LXK stock. Barclays analysts lowered their price target on LXK stock to $21.

LXK stock, meanwhile, fell to its lowest level in more than two years. At last check, the stock was trading 16.25% lower at $20.36 on above average volume of 6.33 million. The stock has now fallen more than 38% this year.

 

 

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