Earnings Briefs

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Lexmark Q2 Revenue Rises 6%
Lexington, Ky. — An 11 percent second quarter sales jump of laser and inkjet printer supplies, to $630 million, compared with a year-earlier $566 million, pushed consolidated second quarter sales at Lexmark International up 6 percent. This reached $1.12 billion, compared with $1.06 billion in the same three months in 2002. Laser and inkjet supplies revenue accounted for 56 percent of Lexmark's total revenue in the three months, up from a prior-year 54 percent. Second quarter laser and inkjet printer revenue edged up 2 percent in the second quarter, ended June 30, hitting $400 million, compared with $394 million year-on-year. Consolidated net income for the second three months came in at $101.7 million, up 14 percent from the $89.1 million recorded year-on-year. Gross profit margin climbed 200 basis points in the second three months, to 34 percent. Second-half consolidated revenue hit $2.2 billion, up from $2.1 billion year over year. Net income reached $196.3 million, compared with a year-earlier $160.6 million. Third quarter revenue is expected in the low to middle single digits.

Logitech Q1 Sales Increase 12%
Fremont, Calif. — Stepping up promotional spending in its fiscal first quarter, due to weaker demand and stronger-than-expected competition, personal interface products maker Logitech International reported a sales increase, but a decrease in profit, for its reporting period, ended June 30. Sales climbed 12 percent in the three months, to $218.2 million, up from $195.1 million in the year-ago period. Operating income was $7.9 million in the first three months, down 38 percent from the $12.6 million registered in the same quarter a year ago. Net income decreased 47 percent in the first quarter, to $5.7 million, compared with $10.8 million year-on-year. Gross margin slid 620 basis points, to 27.8 percent, down from 34 percent in the first three months a year earlier. Logitech noted strong growth in console gaming peripherals and audio and webcam products, but such items as corded computer mice fell short of expectations. In the second fiscal quarter, Logitech expects revenue of $270 million to $280 million, with operating income of $15 million to $17 million and a gross margin of about 30 percent.

Imation Q2 Sales Up, Net Drops
Oakdale, Minn. — Removable data storage media supplier Imation recorded a 2.5 percent sales increase in the second quarter, ended June 30, hitting $268 million, up from $261.4 million in the year-ago period. The data storage and information management segment revenue of $254.7 million increased 3.8 percent. Overall second quarter net income, however, dropped to $19.4 million, down from $21.5 million in the same three months in 2002. Gross margin climbed 30 basis points, to 30.4 percent in the second quarter. Even with economic uncertainty, Imation remains confident in its goal of 5 percent to 10 percent full-year data-storage-segment revenue growth. Full-year operating income outlook is 10 percent to 15 percent year-on-year growth, excluding litigation and restructuring benefits in 2002. Gross margin for the year is estimated in the range of 30 percent to 32 percent. Selling, general and administrative spending is targeted between 15.5 percent and 16 percent.

Plantronics Q1 Revenue, Income Increases
Santa Cruz, Calif. — New headsets for mobile phones were the major contributor to revenue growth at communications headset maker Plantronics in the company's fiscal first quarter, ended June 30. Revenue increased 15.5 percent, hitting $92.8 million, up from $80.3 million in the same three months in 2002. Operating income increased from $13.6 million to $15.7 million year over year. First quarter net income reached $11.3 million, up from $10.2 million in the year-ago period. Looking ahead to the second quarter, Plantronics anticipates revenue in the range of $92 million to $97 million.

Handspring Q4 Revenue, Profit Slide Prior To Palm Acquisition
Mountain View, Calif. — Personal communications and handheld computing company Handspring reported revenue of $14.5 million in its fiscal fourth quarter, ended June 28, compared with $49 million in the year-ago period. Revenue in the quarter included $10.3 million in communicator sales and $4.2 million in sales of organizers and accessories. Handspring, which is being acquired by Palm (the transaction is expected to close in the fall), recorded a net loss of $13 million in the fourth quarter, compared with a net loss of $15.4 million year-on-year. For the fiscal year, revenue dropped to $147.3 million, down from $240.7 million in the preceding 12 months. The company reported a 12-month net loss of $131.1 million, compared with a net loss of $91.6 million in the same period a year earlier. Excluding amortization of deferred stock compensation and intangible assets, the 12-month net loss reached $46.6 million, compared with a loss of $71.4 million a year ago.

Kodak Q2 Photo Segment Sales Down 2%; Digital Camera Sales Up 65%
Rochester, N. Y. — Although sales in the photography segment at Eastman Kodak declined 2 percent in the second quarter, ended June 30, consumer sales of digital cameras increased 65 percent. Photography segment sales in the three months hit $2.34 billion, down from $2.38 billion in the year-ago period. Segment operating earnings reached $119 million in the second quarter, compared with $257 million year-on-year. Kodak said it was cutting 4,500 to 6,000 jobs, beginning later this year, about 6 percent to 9 percent of its global workforce. The company's new round of cost cutting, an effort to counter its slowing film business, came after it reported flat consolidated sales in the second quarter, at $3.3 billion, and a 60 percent decline in net income, to $112 million, from $284 million year over year. The company will take charges in the next 12 months, ranging from $350 million to $450 million, to cover the personnel reduction costs. It anticipates generating $300 million to $400 million from the employee cuts, with $275 million to $325 million expected to be realized in 2004.

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