Dell rules out Lexmark purchase

Interested in ink, not inking

ComputerWire: IT Industry Intelligence

Dell Computer Corp yesterday ruled out making a move to acquire computer printer maker Lexmark International Inc during an earnings conference call with Bear Sterns, the Wall Street analyst that recently speculated that Dell was looking to get into the printer business.

In May, Bear Stearns' Andrew Neff said that the Round Rock, Texas-based company's CEO, Michael Dell, had said he was interested in getting into the printer business to get a share of the lucrative ink cartridge market. While that might still be a market Dell is keen to get into, the company has denied that it is going to do so via the acquisition of Lexington, Kentucky-based Lexmark.

According to a Reuters report, during the conference call with Bear Sterns, Dell's COO Kevin Rollins dismissed the rumored acquisition as "highly unlikely". The company currently sells printers and cartridges from Lexmark as well as Hewlett-Packard Co and Seiko Epson Corp among others, and it is not altogether clear how branding its own printer supplies will make them any more attractive to customers. Additionally, Dell is not the sort of company to make large-scale acquisitions, and at its current share price, Lexmark would cost upward of $6.8bn.

Meanwhile, Dell has repeated its sales forecast for the second quarter. The company is expecting to report earnings of $0.18 per share on revenue up 8% at $8.2bn.

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