Earnings up for Epson’s Third Quarter, but Down for Last Nine Months; Forecast Unchanged

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Seiko Epson Corporation of Japan last week released results for its third quarter and the first three quarters of its fiscal-2015 year (April 1 to December 31, 2015), with the firm generally citing lower demand, particularly in China and developing economies.

For the third quarter, revenue was ¥294.4 billion, down 7.5 percent year-over-year, while profit for the third quarter was 29.0 billion, up 9.9 percent year-over-year.

For the nine-month period, revenue was ¥837.4 billion, up 2.8 percent year-over-year, while profit for the period was ¥55.2 billion, down 39.0 percent year-over-year.

First Three Quarters for Fiscal 2015 Year (April 1 to December 31, 2015)

Printer-business revenue increased, helped in part by foreign-exchange effects. Inkjet-printer revenue increased despite a decline in ink-cartridge printer shipments. Revenue “jumped” as Epson saw “rapidly” expanded sales of its high-capacity ink-tank printers in Asia and elsewhere due to its “reinforcing the lineup, and expanding the sales territory.” Revenue from consumables also increased, the result, Epson says of an improved installed-base composition.

Page-printer revenue decreased due to a decline in unit shipments, the result of Epson’s focus on selling higher added-value models.

SIDM (serial-impact dot-matrix) printer revenue increased on the whole. Although unit shipments decreased, due to the decline of the total market, passbook-printer sales increased in Europe and China due to replacement demand and system-upgrade demand.

Revenue in Epson’s professional-printing business increased, helped in part by foreign-exchange effects.

Large-format inkjet printer revenue grew, despite the effects of “steep currency devaluations and economic deceleration in Latin America and China’s slowing growth.” This growth was driven by continued firm demand in the large-photo and color-calibration (proofing) markets, and by an expanded range of applications for inkjet-textile printers, from apparel to small personal items, and interior goods. Consumables-revenue also grew on increased use and demand for ink.

Epson says that demand for its inkjet printer was flat year-over-year in North America and Europe. Large-format inkjet-printer demand was “firm” in North America, Europe, and Japan, but demand in Latin America was “subdued” due to the effects of economic deceleration.

Demand for SIDM printers continued to contract in the Americas and Europe. Meanwhile, “upgrade demand” from the Chinese tax collection market also shrank. Demand for point-of-sale (POS) system products remained stable in North America, Europe, and Japan.

Nine-Month Results for Other Businesses

Projector demand was sluggish in the “economically uncertain” areas of Europe and Latin America, where Epson says there was a “backlash” in demand from the surge that preceded last year’s FIFA World Cup. Demand was also subdued in Asia due to concerns about an economic downturn.

Cell phones and digital cameras are the main applications markets for Epson’s electrical devices. In the cell-phone market, demand for feature phones continued to decline, while demand for smart phones remained firm. Demand in the digital-camera market was “subdued.”

In the precision-products market, demand for Epson watches in Japan was strong, aided in part by demand from overseas visitors. Demand was also firm in Europe, but demand in China was weak due to slack consumption. Demand for industrial robots increased in the electronics- and electrical-machinery industry in response to a growing need for automation.

Forecast

Espon hasn’t changed its full-year fiscal outlook from its previously announced forecast made in October 2015. It’s forecasting ¥1,100.0 billion in revenue and ¥60.0 billion for its full year.

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