Lexmark Profits Rise, Boosted by Ink Cartridges

NEW YORK (Reuters) – Lexmark International Inc. (NYSE:LXK – news), the computer printer maker, on Monday reported a 29 percent jump in third-quarter net income on better margins and robust sales of ink cartridges for its inkjet printers.
Lexmark, the No. 2 maker of inkjet printers after Hewlett-Packard Co. (NYSE:HPQ – news), also raised its fourth-quarter outlook. However, it remains cautious due to weak technology spending, a sluggish consumer market and aggressive competition.
Analysts note that with over 41 million Lexmark printers sold — including 37 million inkjet models — the company can count on consumers to keep coming back for more replacement cartridges. Sales of laser and inkjet supplies during the third quarter rose 19 percent to $568 million from a year earlier and represented 55 percent of Lexmark’s total revenue.
(full story)
My spin:So if all the printer dough is made in selling ink cartridges I wonder is DELL making a mistake in entering this market and is HP right?
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