Earnings Dip for Epson’s Second Quarter, but High-Capacity Ink-Tank Printers Show Strong Growth
On October 29th, Seiko Epson of Japan reported financial results for its fiscal-year second quarter, with second-quarter revenue increasing by 15.5 billion yen to 282.0 billion yen. However, profit for the period was 15.6 billion yen, down 3.4 billion yen.
For its second quarter, revenue grew year-over-year in every segment, in part due, Epson says, due to favorable foreign-current exchange-rate effects. Revenue for the company as a whole exceeded Epson’s previous outlook because of higher revenues from revenue in printing solutions.
Business profit in printing solutions and visual communications however declined year-over-year and ended below the previous outlook. Wearable and industrial products, on the other hand, recorded business profit growth.
Key Factors for Second Quarter
For its second quarter, Epson says it was “severely impacted” in printers, projectors and other finished products businesses as price rises and other countermeasures were unable to keep pace with the rapid devaluation of Latin American currencies.
However, Epson says it enjoyed steady sales of high-capacity ink-tank printers, higher-priced business models, and ink. On the other hand, there was a delay in some production adjustments for ink-cartridge models. However, Epson says it experienced higher manufacturing costs for inkjet printers produced overseas due to the appreciation of the U.S. dollar, while in North America there was price erosion for consumer and low- and mid-range office models due to the price promotions of competitors.
Overall in the second quarter, Epson says it was affected by the global economic slowdown and aggressive promotional pricing by competitors.
First-Half of 2015 Fiscal Year
For the first half of its fiscal year that ends in March 2016, Epson reported that revenue was 542.9 billion yen, up 30.1 billion yen compared to the same period last year. Business profit was 40.2 billion yen, down 10.6 billion yen. Profit for the period was 26.1 billion yen, down 39.5 billion yen. Revenue was in line with Epson’s forecast, however, profit for every category fell below expectations.
For its entire fiscal-year 2015, Epson has revised its outlook. It’s lowering its full-year revenue outlook compared to the previous outlook by 15 billion yen down to 1,100 billion yen in revenue
It’s also lowering its full-year business profit outlook compared to the previous outlook by 14 billion yen in printing solutions and by 7 billion yen in visual communications. It is however raising its outlook for wearables and industrial products by 1 billion yen.
- October 2015: Epson High-Capacity Ink-Tank Printers Achieving 40% Sales Growth; Plans New Print-Head Factory to Meet Demand
- August 2015: First-Quarter Income Down for Epson, but Printer Revenue Remains Healthy
- August 2015: New Epson ‘Supertank’ Refillable Inkjet All-in-Ones Said to Print up to Two Years Without Needing Ink Replaced
- May 2015: Bolstered by Inkjet Revenue, Epson Reports Robust Financial Results
- June 2015: Epson Completes Buyout of Italian Textile-Printing Company For.Tex S.R.L.
- January 2015: Revenue, Income up for Epson’s Third Quarter; Ink-Tank Printers Lead Revenue Growth
- December 2014: Epson Acquires K-Sun to Expand its Presence in the Industrial Label-Printing Market
- December 2014: Epson to Invest 12.3 Billion Yen in Inkjet-Printer, Projector, and Smart-Glasses Manufacturing Facility
- November 2014: Strong Quarter for Epson; Higher-Priced Inkjet Printers Help Drive Growth
- July 2014: Revenue and Earnings Exceed Epson’s Expectations for Latest Quarter
- July 2014: Epson to Invest Some 10 Billion Yen Over 12 Months in PrecisionCore Inkjet Printing
- June 2014: Epson Betting Big on Inkjet, to Invest $100 Million
- April 2014: Epson Reports Sharp Improvement for Fiscal Year; Sales of High-Capacity Inkjets Lift Revenue