Lexmark Soaring on Strategic Initiatives

Shares of Lexmark International

are soaring in early trade on Tuesday after the company announced that it would be exiting the inkjet printer business and cut 1,700 jobs worldwide. At last check, LXK had surged 14 percent to $21.65 after actually opening lower on the news. The company's plan will save it $95 million annually once it is completed. Lexmark will continue to service and support its installed base of inkjet printers despite the fact that the company is exiting the printer manufacturing business. “Today's announcement represents difficult decisions, which are necessary to drive improved profitability and significant savings,” CEO Paul Rooke said in a statement. “Our investments are focused on higher value imaging and software solutions, and we believe the synergies between imaging and the emerging software elements of our business will continue to drive growth across the organization." The 1,700 job cut represents nearly 13 percent of the company's workforce. Roughly 1,100 of the jobs will be trimmed from Lexmark's manufacturing business. The company also said that it is talking with financial advisers about a sale of its inkjet technology. Pre-tax costs related to the restructuring initiatives are expected to be $160 million with $110 million coming in 2012 and the rest in the subsequent three years. Lexmark also boosted its stock repurchase plan by $100 million to $251 million.