Lexmark quarterly profit rises, to close Mexico plant

NEW YORK (Reuters) - Computer printer maker Lexmark International Inc (LXK.N: Quote, Profile, Research, Stock Buzz) on Tuesday reported an increase in quarterly profit on higher corporate sales and said it plans to close a factory in Mexico that will affect 650 jobs.

Lexington, Kentucky-based Lexmark, which competes with Hewlett-Packard Co (HPQ.N: Quote, Profile, Research, Stock Buzz), said net income rose to $83.7 million, or 89 cents a share, from $64.2 million, or 67 cents a share, one year ago.

Excluding one-time items such as restructuring costs, the company earned 96 cents a share. On that basis, analysts were expecting 78 cents a share, according to Reuters Estimates.

Revenue fell 6 percent to $1.14 billion, matching analysts estimates.

Lexmark, which has been cutting costs and trimming prices to better compete with rivals such as HP and Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz), said business segment revenue rose 4 percent to $763 million.

However, consumer segment revenue of fell 21 percent to $376 million. The company attributed the decline to its strategic changes and a slowdown in the inkjet market.

Last October, Lexmark said it would consolidate operations in Mexico, including closing a plant and moving some 1,650 jobs to lower-cost countries.

In the move announced on Tuesday, Lexmark would shutter an inkjet supplies manufacturing facility in Mexico. Some 650 positions will be affected by the end of 2008, with most jobs moved to a lower-cost country.

The move is expected to cost about $24 million but save $9 million annually beginning in 2009, Lexmark said.