Robust First Quarter for Epson, ‘Acclaim’ for Enterprise Inkjet MFPs

Epson Innovation Center in Japan.

Seiko Epson of Japan has released financial results for its fiscal first quarter that ended on June 30th, 2017, reporting ¥254.8 billion in revenue, up ¥15.7 billion year-over-year. Business profit was ¥16.7 billion, up ¥10.2 billion, and profit for the quarter was ¥10.3 billion, up ¥6.1 billion, both year-over-year

Epson says that foreign-exchange rate currency fluctuations had a ¥3.1-billion positive effect on revenue for the quarter, and a ¥0.5-billion positive effect on business profit. The Japanese yen remained weak relative to the U.S. dollar and euro compared to Epson’s full-year financial outlook that Epson announced on April 28th. The firm says that this “somewhat inflated” its revenue and business profit, but if these foreign-exchange rates are excluded, both revenue and business profit were generally in line with its outlook.

Revenue increased compared to the same period last year in printing solutions, visual communications, and wearable products and industrial solutions.

The printer business as a whole posted revenue growth even though unit shipments of inkjet printers decreased, mainly due to consumer-market softness in some developed economies and competitors’ promotions, and despite a decrease in SIDM (dot-matrix) printer shipments compared to the first quarter of last year, when amendments to China’s tax system generated extra demand. Driving revenue growth were high-capacity ink-tank inkjet printers, which continued to see “solid demand in both emerging and economically developed markets, and ink sales, which remained stable, though demand varied from
market-to-market.”

In June 2017, Epson launched high-speed line-head MFPs that print at up to 100 ppm in Japan and Europe, with the firm stating that it’s “made a smooth start and received acclaim from dealers, distributors, and customers.”.

Overall, Epson says that its “dealers and distributors (have) come to see that we are serious about enterprise printing, and we are now approaching high print-volume users who were out of reach with our past product lineup.”

It also states that “the response from dealers and distributors in the U.S. and China has exceeded expectations, so we are confident in the growth potential going forward.”

Professional and Commercial Printing

Revenue for Epson’s professional printers “grew as a whole.” Epson says it “steadily expanded large-format printer sales in the growing signage, textile, and label segments.” It also recorded “firm sales” of POS (point of sale) printers in Europe and the United States.

Overall, Epson’s Printing Solutions group posted year-over-year business profit growth. In addition to the effect of higher revenue from increased sales of high-capacity ink-tank printers, Epson’s printer business reduced its costs and increased profit by reducing ink-cartridge inkjet printer production compared to the same period last year.

The firm reduced ink-cartridge printer production compared to the same period last year when there was a temporary increase in production volume to build inventory after it fell “too low” at the end of Epson’s 2015 fiscal year.

Epson restored ink-cartridge printer production volume to an ordinary level this year after temporarily increasing it in the first quarter of last year to build inventory after it fell too low at the end of the 2015 fiscal year.

Epson’s Professional Printing’s business profit increased on higher revenue generated mainly by sales of large -format printers.

Forecast

For its full fiscal-year 2017, Epson is forecasting 1,070 billion yen in revenue, 79 billion yen in business profit, and 58 billion yen in profit.

The firm states: “We got off to a smooth start in the first quarter. Our results were, by and large, in line with our original outlook, excluding foreign-exchange effects.”

From Epson’s second fiscal quarter, it expects transportation expenses for its  printing solutions to increase because of a fire that occurred in the first quarter at an inkjet printer-components supplier. On the other hand, it forecasts an increase in unit shipments of high-capacity ink tank printers.

The firm is also forecasting a weaker yen versus its previous outlook.

Epson’s latest financial outlook doesn’t “differ significantly” from its original outlook, when excluding foreign-exchange effects, but in addition to the revised foreign-exchange assumptions, Epson factored in an increase in fixed costs.

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