Lexmark announced today that their earnings had increased slightly over last year, but not enough to make their stock go up. Lexmark has been suffering lately due to HP’s continued dominance and their own continued stinkiness.

In the past year they have cut 20% of their inkjet sales in order to get rid of sales that weren’t generating long-term profits for them. The sales that they cut out were bundled sales, meaning deals where they gave away a printer with a computer. Those deals used to be all the rage, but a lot of people wised up to them and they don’t seem to be as popular as they once were. Since Lexmark doesn’t make their own computers, they don’t have the advantage that HP has where they can bombard people with bundles everywhere they go. Lexmark has to rely on the printers that they sell to Dell in order to sell any bundles, and by doing that they lose any value from ink cartridges purchased down the road.

Lexmark said that “consumers fail to buy enough ink cartridges and supplies over the products’ lifetimes to offset low profit margins on the initial piece of hardware”. Well, the reason for that is probably that Lexmark printers, especially those you get for free, are junk and they won’t last a few years. If someone’s Lexmark inkjet breaks, they probably aren’t going to be buying a whole lot of ink for it. Also, Lexmark (along with Dell) leads the way in “most negative responses to ink prices” when people go to buy their first set of cartridges. We have heard from lots of people who got a Lexmark inkjet for free/very little who immediately abandon the printer once they see the $40 cartridges.

Apparently Lexmark decided to focus on all-in-one printers and color laser printers, two things they really haven’t been known for the in the past but two areas where the most profits are found. So don’t hold your breath waiting for that free Lexmark bundled with your shiny new computer.

Lexmark working hard to right itself [Kentucky.com]