Epson Releases Third-Quarter Financials for FY19

On Jan. 31, 2020, Seiko Epson Corp. released its FY third-quarter financials for the period ending Dec. 31, 2019.

Revenue of ¥279.8 billion ($25.7 billion) was down ¥16.8 billion compared to the same period last year. Business profit was ¥17.6 billion ($161.6 million), a decline of ¥13.2 billion, and profit for the period was ¥12.2 billion ($112 million), down ¥13.4 billion.

Epson’s printers were a strong point for the company in Q3, as it noted continued expansion in strategic products such as high-capacity ink tank printers, shared office printers, and commercial and industrial printers for signage and textiles. However, revenue decreased due to a combination of factors, including a decline in sales of hardware and consumables for ink cartridge printers, sales of SIDM (single-impact-dox-matrix) printers, worsening conditions in the projector market, stagnation of the analog quartz watch market, and negative foreign exchange effects.

Printers

Digging deeper into the Printing Solutions business, total revenue was down 8.8 percent year-over-year to ¥192.9 billion ($1.8 billion), with the Printer sales segment down 9.8% to ¥134 billion ($1.23 billion). Inkjet printers (IJPs), including high-capacity ink tank, SOHO/home and office shared IJPs, comprise 85% of that segment, which was down 1% year-over-year in revenue and up 2% in volume. Ink revenue was down 12%. Epson reports high-capacity ink tank printer unit shipments increased in both emerging and developed economies and sales of office inkjets grew while SOHO and home hardware and ink decreased. Specifically, Epson says it achieved steep growth in North America where it strengthened promotions, as well as in Europe, Japan, and other developed markets, helping to increase global unit shipments by more than 20% year on year. Overall, the printer business accounted for mid 50s% of segment profit.

Outlook

While Epson revised its full-year financial outlook for each segment, but the consolidated totals have not changed since the previous outlook. The firm is forecasting ¥1.06 trillion ($9.7 billion) in revenue, ¥42 billion ($386 million) in business profit, and ¥27.0 billion ($248 million) in profit for the year. Exchange rate volatility for the full year compared to the previous fiscal year is expected to have an approximately ¥42.0 billion negative effect on revenue and a ¥16.0 billion negative effect on business profit.

Epson projects no change in forecast of 10.2 million high-capacity ink tank printer unit shipments, and continued firm sales of commercial and industrial IJPs in growth areas (signage, textiles, etc.) “We are forecasting sales growth in high-capacity ink tank printers in both advanced and emerging markets as we progress toward our 10.2 million unit sales target,” said Epson’s earnings presentation.

The presentation also outlined several items “progress in growth initiatives,” including the following:

  • In the commercial and industrial sectors, we have also begun to provide solutions built around Color Control Technology. We believe that this solution, which facilitates color adjustment for each printer and for each type of media, is the key to digitizing printing and advancing distributed printing.
  • We also developed and launched new products to expand our lineups.
  • We added new products to our office, commercial, and industrial printer lineups, and have more new models that are preparing to launch.
  • In the summer of last year, a new factory for PrecisionCore printheads began operations, and we have begun strengthening our external printhead sales business.
  • Printer manufacturers, most notably manufacturers in China, are adopting these printheads as the lineup expands, and large-format printers with Epson’s printheads are beginning to emerge, so things are looking promising for next year.

“The external environment is extremely challenging,” read the presentation “but we will continue to move forward on initiatives that will connect to future growth.”

See the full report and supporting materials at Epson’s Investor Relations page.

 

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