Profits Plunge for Epson’s First Quarter, But Maintains Forecast

Seiko Epson of  Nagano, Japan, has reported results for its fiscal first quarter that ran from April 1 to June 30, 2019, reporting profits of ¥249 million for the quarter, down 97.8 percent versus profits of ¥11,116 million for the same quarter a year earlier.

Total comprehensive income for Epson’s first quarter was a loss of ¥6,950 million, versus ¥17,989 million for the same quarter a year earlier

Revenue also slid – but less dramatically – for the quarter, with Epson reporting revenue of ¥250 billion, down 4.2 percent year-over-year.

Worsening Economic Environment

Epson cited a worsening economic environment, stating that global economic activity had slowed, particularly in China. It also stated that the growing value of the Japanese yen affected its fiscal results, with the yen’s value rising against the European euro, Chinese yuan, and currencies of emerging economies.

The company reported the following revenue summary for the quarter:

  • High-capacity ink-tank printer sales were flat year-over-year due to sluggish
    Asian markets
  • Projector demand declined year-over-year.
  • Demand for Epson robots and microdevices declined in China
  • Overall, sales in some businesses and products were slower than Epson initially had forecast.

Year-over-year, revenue for Epson’s Printing Solutions group was down 3.4 percent, while business profit for the Printing Solutions group was down 4.2 percent year-over-year.

Within the Printing Solutions’ group, revenue for printers – consisting of 82 percent   inkjet models –  was down 8.2 percent year-over-year.  However, revenue generated by Epson’s Professional Printing group was up 2.9 percent.

Overall for the Printing Solutions’ group, sales of SOHO ink and ink-cartridge inkjet models declined, while sales of high-capacity ink-tank inkjet models were flat.Sales of signage, textile, and label printers increased.

For its Printing Solutions group, Epson says it will continue to grow its dealer network for its office models, as well continue to seek growth in signage, textile, and label printing.

As for Epson’s other business groups, revenue generated by Epson’s Visual Communications’ group was down 2.1 percent year-over-year, while revenue generated its Wearable & Industrial Products’ group was down 5.0 percent year-over-year.

Full-Year Forecast

For its fiscal year that will end on March 31, 2020, Epson maintained its fiscal outlook. It’s forecasting that revenue will increase 3.7 year-over-year, and profits attributable to company owners will be down 16.2 percent. It is also forecasting full-year earnings per share (EPS) of ¥129.07.

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