Slow Fiscal Year for Epson, but ‘Solid Demand’ for High-Capacity Inkjets
Seiko Epson of Japan this week reported results for its full fiscal year that ended on March 31, 2017, with revenue of ¥1,024.8 billion, down 6.2 percent, but profits up 5.6 percent to ¥48 billion ($430,698 million U.S.), both versus the company’s previous fiscal year.
Epson says that demand for its inkjet printers was stagnant, due to the continuing contraction of the Japanese consumer market and a shrinking of the North American and Western European markets.
On the other hand, there was”solid demand” for high-capacity ink-tank inkjet printers, as the entry of other companies had the effect of boosting recognition.
Large-format inkjet printer demand was “subdued” in China and Latin America due to economic deceleration but remained firm in North America and Japan.
Serial-impact dot-matrix (SIDM) printer demand in China in the first half of the year was driven by that country’s change from a business tax to a value added tax (B2V tax reform). However, demand continued to contract in the Americas and Europe.
Projector demand increased in Europe ahead of major sporting events, but overall demand was subdued due to the effects of the economic slowdown in Latin America, a sluggish North American retail market, and weak demand for education projectors in some major European countries. However, Epson says its saw signs of a slight recovery throughout the second half of the year.
In the mobile-phone market, demand for phones continued to decline, while demand for smartphones remained “firm, owing primarily to growth of emerging market manufacturers in China and elsewhere.”
Demand in the digital-camera market was “subdued.”
Demand for watches “fell sharply” overall due to softening demand from tourists to Japan, declines in demand in China and North America, and a soft market for watch movements.
Demand for industrial robots remained firm in the Americas and China, as well as in Japan, where sales to the automotive industry were firm.
Printing Solutions Segment
Epson’s Printing Solutions Segment Printer segment’s revenue declined for the full year.
Total inkjet-printer revenue declined. However, high-capacity ink tank printer revenue continued to expand, as the entry of other companies into the high-capacity ink tank printer market is said to have “boosted market recognition and helped to fuel a sharp increase in unit shipments.”
However, Epson says that, given the contracting market, shipments of ink-cartridge models declined mainly in the home market. Revenue was also dragged down by foreign-currency exchange-rate effects.
Although consumables’ sales volume decreased, Epson says its product mix is improving, with consumables for office printers, which have a higher unit price, accounting for a greater percentage of total consumables sales.
However, revenue from consumables decreased due to the negative effects of foreign-currency exchange-rate rates.
Page-printer sales decreased due to a slump in consumables sales in addition to a decline in unit shipments, the result of Epson’s focus on selling high added-value models.
For SIDM printers, foreign-currency exchange-rate effects caused revenue to decline despite extra first-half demand in the Chinese tax-collection system market.
Revenue in Epson’s professional-printing business decreased. Large-format inkjet printer total revenue decreased, partly due to foreign-currency exchange-rate effects.
Sales of Epson’s new products in the growing signage printer market were “strong,” however, and sales expanded in the textile-printer segment on heightened demand. However, a decrease in shipments in the existing photo and graphics printer markets resulted in a decline in total revenue in this category.
Consumables sales also decreased on lower revenue, a result of a decline in printer sales and foreign-currency exchange-rate effects.
POS (point-of-sale) printer revenue decreased. Although demand for low-end models was firm in Europe, total unit shipments declined due to a lack of large orders such as those received in the previous fiscal year in Japan and North America. Sales volume also decreased in China.
Overall profits for Epon’s printing solutions segment decreased even though profit rose on increased sales of high-capacity ink-tank inkjet printers. Epson says the decrease in segment profit was due to a combination of factors, including a decrease in large-format inkjet printer sales, strategic investment and spending on medium-term growth, and foreign-currency exchange-rate effects.
As a result of these factors, revenue in the printing solutions segment was ¥686.6 billion, down 6.8 percent year-over- year. Segment profit was ¥84.1 billion, down 19.7 percent year-over-year.
Epson says that for its current fiscal year, it’s forecasting that revenue will be up 0.5 percent and profits up 1.8 percent compared to its previous fiscal year
The firm says it’s steadily advancing in line” with its Epson 25 Mid-Range Business Plan (FY2016-2018). The plan includes expanded sales of strategic products; further development of new market segments; further development of strategic products to drive future growth; and strengthened business infrastructure.
- April 2017: Epson Has Sold over 20 Million Ink-Tank Inkjet Printers
- February 2017: Revenues, Profits, Decline for Epson, but High-Capactiy Ink-Tank Printers’ Revenues Expand
- October 2016: Revenue, Profits Down Again for Epson’s Latest Quarter, Continues Focus on High-Capacity Ink Tanks
- October 2016: Epson Plans on Bigger Push into UAE, Saudi Arabia Consumer-Printer Markets
- August 2016: Epson Stumbles in Latest Fiscal Quarter, but Reports Increased Sales of High-Capacity Ink-Tank Printers
- August 2016: Two New ‘Supersize’ EcoTank Inkjet All-in-Ones from Epson, Including First Wide-Format ‘Supersize’ All-in-One
- July 2016: Epson Says it’s Sold 15 Million High-Capacity Ink-Tank Printers Since 2010
- June 2016: Epson Continues to Expand into Textile-Printing Market with Acquisition of Robustelli
- April 2016: Epson Reports Full-Year Results; 100-PPM Line-Head Inkjet Printers May Be on the Way
- March 2016: Impression Solutions to Distribute Epson Business Inkjets with Replaceable Ink Packs to Office-Equipment Dealers
- February 2016: Epson Increasing Production of Ink Bottles for High-Capacity Ink-Tank Printers, All-in-Ones
- February 2016: Epson Says it’s Sold More than a Million InkTank Printers in India
- February 2016: Earnings up for Epson’s Third Quarter, but Down for Last Nine Months; Forecast Unchanged
- January 2016: Epson to Triple PrecisionCore Inkjet Print-Head Production with 20 Billion Yen Investment
- November 2015: Epson Seeking to Have Faster, More Precise Volume Manufacturing 3D Printer on the Market in About Five Years