Seiko Epson has first annual loss in 4 years

Seiko Epson recorded its first net loss in 4 years for the fiscal year that just ended as restructuring costs exacerbated already tough market conditions.

Seiko Epson recorded its first net loss in 4 years for the fiscal year that just ended as restructuring costs exacerbated already tough market conditions for the Japanese company.

The company lost YEN 18 billion (AUD$210 million) in the 12 month period to the end of March compared with a profit of YEN 56 billion in the previous fiscal year, it said. Net sales increased 5 percent to YEN 1.6 trillion in the same period.

The company is being hit by falling prices for its mainstay inkjet printer products. The problem is especially affecting the printer-only models, which are falling out of favor as consumers continue to be attracted to multi-function printers that offer additional functions like copying and photo printers. As a result, Epson plans to reduce in the next 12 months the number of stand-alone printers it offers, it said.

Falling prices also impacted the company's 3LCD projector and laser printer businesses but unit shipments rose so revenue from sales of the devices increased along with revenue from sales of business projectors and dot-matrix printers, it said.

Overall, Epson's information equipment unit sales grew 3 percent in the 12 months, although for the current fiscal year, which runs from April to March 2007, business isn't expected to be as good.

Sales are expected to fall primarily due to the reduction in the number of stand-alone printers offered by the company, although anticipated strong sales of dot-matrix printers in markets such as China will help business overall, it said.

In its other business units, results for the year just ended were mixed. Revenue from sales of display panels for use in some models of projector fell while Epson said sales volume of TFT (thin-film transistor) LCD (liquid crystal display) panels soared. Semiconductor revenue was down sharply as fierce competition hit prices.

For the current year, Epson said it expects net sales to be almost unchanged at YEN 1.6 trillion and for net income to recover to a profit of YEN 14 billion.

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Martyn Williams

IDG News Service
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