Epson Reports Latest Financial Results

Epson Innovation Center in Japan.

Seiko Epson of Tokyo, Japan, today reported results for its first fiscal quarter (April 1 to June 30, 2018), reporting  ¥260.4 billion in revenue for the quarter, an increase of 2.2 percent compared to the same period last year.

Epson says revenue growth was driven primarily by increased sales of high-capacity ink-tank inkjet printers in its printing solutions segment; sales of 3LCD projectors in the visual-communications segment; and sales of semiconductors in its wearable and industrial products segment.

Business profit came in at ¥14.6 billion, a year-over-year decrease of 12.7 percent. Epson says that although revenue growth and foreign-exchange rates were positive factors, business profit declined due to Epson’s strategic investment in future growth and lower revenue from ink cartridges, and because ink-cartridge printer production expenses returned to normal this year compared to last year, when ink-cartridge printer production expenses fell after a fire at a vendor’s facility caused production to be deferred.

Profit from operating activities was ¥13.4 billion, down 8.2 percent year-over-year. Profit before tax was ¥14.3 billion, down 0.8 percent year-over year.  Profit was ¥11.1 billion, up 9.4 percent year-over-year.

Printing-Solutions Segment

Epson’s printer-business revenue increased. Inkjet-printer revenue as a whole increased despite the decrease in ink-cartridge printer sales, the result of limiting promotions and maintaining prices even as competitors “aggressively stepped up their own price promotions.”

Epson says the increase in revenue for its printing-solutions segment came from continued strong growth in sales of high-capacity ink tank printers in both emerging and advanced economies.

Consumables revenue decreased. Epson explained that although revenue derived from sales of ink bottles for use with Epson high-capacity ink tank printers grew, ink- cartridge sales slipped as Epson’s installed consumer ink-cartridge printer installed base declined.

Revenue for Epson’s  professional-printing business decreased. Large-format inkjet printer revenue was flat year-over year, as “solid sales” in the growing signage, textile, and label printer markets were offset by weaker sales in the photo and graphics printer markets, where Epson says competitors aggressively undercut prices. Point-of-sale (POS) printer sales decreased chiefly due to deferment of proposals for tenders in North America.

Segment profit in the printing solutions segment decreased. Although the segment benefited from high-capacity ink-tank printer revenue growth and favorable foreign-exchange currency effects, segment profit decreased due to the effects of a decline in ink-cartridge revenue and because ink-cartridge printer production expenses returned to normal this year.

As a result, revenue for Epson’s printing solutions segment was ¥166.6 billion, up 0.4 percent year-over-year. Segment profit was ¥17.9 billion, down 19.0 percent year-over-year.

Outlook

Epson says it hasn’t changed its previously announced outlook. For its full fiscal year, it’s forecasting revenues of ¥1,050.0 billion yen, and profit of ¥58.0 billion yen.

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