Moody's cuts Lexmark

Moody's Investors Service said it lowered the long-term senior unsecured rating of Lexmark International, Inc. to Baa3 from Baa2.

The outlook is negative.

"The downgrade reflects the challenges that the company's faces in rebuilding its installed base of laser and inkjet printers in the face of a weak demand environment and aggressive competition from a group of larger and more diversified competitors," said Moody's senior vice president, Richard Lane.

The analyst went on to say, "As a result of several quarters of declining printer unit sales, the agency said it expects that revenue derived from the highly profitable aftermarket supplies will continue to be pressured, having fallen in the mid-teens percent in the last two quarters."

Currently providing support to the rating relative to the higher levels of business challenges is that Lexmark maintains a good liquidity profile with over $800 million of cash and moderate financial leverage, Moody's said.

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