Epson Reports Overall Decline in Printer Business for 4Q2012

Seiko Epson announced its financial results for the fourth quarter of its fiscal year 2012, ended March 31, 2013. Epson’s sales in 4Q2012 totaled ¥227.1 billion ($2.4 billion), up 6.5% from ¥213.3 billion in the year before. Operating income grew by 168.7% to ¥9.4 billion ($99.9 million). Net income, however, decreased from ¥7.0 billion in the year-ago period to a net loss of ¥0.7 billion ($7.4 million) in 4Q2012 ended this March 2013.

Net sales for the full fiscal year were ¥851.3 billion ($9.1 billion), down 3.0% from the prior year. Operating income was ¥21.3 billion ($226 million), down 13.7% from the prior year. Ordinary income was ¥17.6 billion ($187.4 million), down 34.8% from the prior year. And, net loss was ¥10 billion ($107.3 million), compared to net income of ¥5 billion in the previous year.

Epson’s Information-Related Equipment segment, which consists of printers, visuals and other businesses, reported ¥688.0 billion ($7.3 billion) net sales, a 0.5% decline compared with fiscal 2011. Operating income was ¥52.7 billion ($560.0 million), down 18.8 percent from the year prior.

The printer business as a whole reported a decline in net sales (including both printer units and consumables).

In the inkjet printer business the average selling price of inkjet models that use ink cartridges rose but hardware unit shipments decreased, causing net sales in that category to decline. On the whole, however, net sales in inkjet printer hardware grew thanks to unit shipment growth in high-capacity ink tank models. Net sales of consumables for inkjet printers declined.

Large-format printer (LFP) unit shipments declined in the face of an ongoing slump in hardware demand in the printing industry, but new high-end products bumped up average selling prices and, as a result, net sales. Even though shipments of LFP consumables shrank in response to declining print volume in the printing industry, consumables net sales increased thanks largely to the new LFPs in the high price zone, which helped increase average selling prices.

For fiscal 2013, Epson forecasts its net sales will reach ¥910.0 billion, operating income of ¥33.0 billion, and net income of ¥13.0 billion. For the first half of the year, it expects net sales of ¥430.0 billion, operating income of ¥3.0 billion, and a net loss of ¥5.0 billion.

According to Epson, “In the printing systems business we will look to create an innovative printing environment by leveraging inkjet technology. In inkjet printers we will, over the medium term, improve the model mix, realign the product mix and business model, and boost competitiveness by launching inkjet units that sport a new print head. At the same time, we will further enhance service and support, including IT solutions.”

To be more precise, Epson will:

Reduce low-end consumer and office models

Heighten Epson’s presence in the premium zone for consumer inkjets

Expand and upgrade the lineup of office inkjets featuring new print heads

Expand high-capacity ink tank models

Roll out LFPs for signage in North America and enter the sublimation transfer textile printer market

By fiscal 2013, Epson expects that 50% of its inkjet shipments to the Asia Pacific and Latin America will be high-capacity ink tank models.