Revenue, Profits Down Again for Epson’s Latest Quarter, Continues Focus on High-Capacity Ink Tanks

Epson Ink Packs

Seiko Epson of Japan has reported results for its second fiscal quarter that ended on September 30, 2016, with revenues down 10.2 percent, and profits down 7.5 percent, both versus the same quarter a year ago.

Epson’s Printing Solutions’ revenue was down 23.4 percent year-over-year, but rose to 161.3 billion yen, versus the 157.3 billion yen reported for Epson’s previous (first) quarter.  Profit for the Printing Solutions group for the second quarter was down 3.7 percent versus the same quarter a year ago, but rose to 21 billion yen versus the 12.8 billion yen reported for Epson’s previous (first) quarter).

For its second quarter, Epson also reported:

  • Large-format printer revenue growth was up in segments such as signage printing.
  • Professional and “prosumer” photo-printer revenue was down.
  • In its inkjet-printer business, there was “steady ongoing growth” for its high-capacity ink-tank office printers, but revenue was down for inkjet printers, due it states, to “printer price erosion” and the effects of a stronger Japanese yen.
  • SIDM (serial impact dot-matrix) printer shipments to China were up, “despite a gradually shrinking market,” but revenue was down due to the effects of a stronger Japanese yen.

Overall, Epson reported that demand for inkjet printers continued to decline, as the Japanese consumer-printer market contracted sharply, and the North American market also shrank. On the other hand, it says there was “solid demand” for Epson high-capacity ink tank printers, “as the entry of other companies had the effect of boosting recognition.” Large-format inkjet-printer demand was “firm” in North America and Japan, but demand in China and Latin America was “subdued,” due to the effects of “economic deceleration.” SIDM printer demand was “firm” in China, where a major tax overhaul produced “extra demand” in the China tax-collection market, but demand continued to contract in the Americas and Europe.

Epson says that profits for its printing-solutions segment decreased, even though profits rose on increased sales of high-capacity ink-tank inkjet printers. It says the decrease in profits was due to “a combination of factors,” including a decrease in large-format inkjet printer sales, strategic investment, spending on medium-term growth, and the effects of a stronger Japanese yen.

 

high-cap-inkjet-shipments

First Half of Fiscal Year

For the first six months of its fiscal year that ended on September 30, 2016, Epson reported that revenues were down 10.2 percent, and it also reported a loss of approximately 16 billion yen.

Strategy

Epson says its strategy will be further increase high-capacity ink tank printer shipments, and achieve stable ink revenues. It says its development of a line-head inkjet printer also remains “on track,” and that it also plans to increase growth in professional printers for printing signage, textiles, and labels.

Forecast

For its entire fiscal year that will end in March 2017, Epson revised both its revenue and profits forecasts. It’s now forecasting revenue of 1,000.0 billion yen, versus its previous outlook of 1,030.0 billion yen, and profits of 46.0 billion yen, versus its previous outlook of 54.0 billion yen.

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