Epson reports increases in inkjet sales in Q1 financials

Epson has released its financial results for the first quarter.

The company reported ¥314.8B in revenue (increase), and ¥15.5B in business profit (decrease), with explanatory notes:

• Revenue and profit increased in printing solutions and visual communications due to the easing of supply constraints and foreign exchange effects.
• Revenue and profit decreased in manufacturing-related and wearables mainly due unit volume decreases caused by inventory adjustments in the micro devices market.

First quarter revenue increased compared to the same period last year, while business profit decreased. Whereas revenue and profit in printing solutions and visual communications increased due to the easing of supply constraints and foreign exchange effects, revenue and profit in manufacturing-related and wearables decreased because unit volume fell due to inventory adjustments in the micro devices market.

 Business profit was ¥15.5 billion, down ¥7.0 billion year on year. Foreign exchange effects had an ¥11.6 billion positive impact on revenue and a ¥2.5 billion positive impact on business profit. Profit for the period was ¥20.1 billion because we recorded foreign exchange gains due to the weak yen in profit from operating activities and profit before tax. Both revenue and business profit were in line with the internal plan, which served as the basis for the previous outlook. This was in part due to positive foreign exchange effects.

Printing Solutions

Revenue was ¥215.1 billion, up ¥17.4 billion year on year.

• Segment profit was ¥22.3 billion, up ¥1.2 billion.
• In office & home printing, revenue increased but profit decreased.
• Inkjet printer revenue was flat year on year because a decrease in sales of ink cartridge printers was offset by growth in high-capacity ink tank printers and positive foreign exchange effects.
• Ink revenue increased by 9%. In addition to foreign exchange effects, this increase was the result of an increase in the number of machines in the field and a corresponding increase in sales of high-capacity ink bottles.
• Office shared printer revenue increased owing primarily to growth in sales of new products in the medium-speed zone, the easing of unit supply constraints, and increased ink sales.
• Despite this revenue growth, business profit in office and home printing decreased because SG&A expenses rose as we ramped business activities back up.
•  Inkjet printer unit sales fell short of the internal plan, but revenue was in line with the plan thanks, in part, to foreign exchange effects. Business profit exceeded the plan primarily as a result of efforts to control selling prices and costs.

Commercial and Industrial Printing

Commercial and industrial printing revenue and profit increased as sales grew compared to the same period last year, when supplies were constrained.

• Though hurt by rising interest rates that have curbed the appetite for investment, the commercial and industrial inkjet printer finished products business increased revenue in signage and other growth areas.
• Revenue in the printhead sales business grew thanks to the steady expansion of sales to printer manufacturers in China after the resumption of exhibitions in China post-Covid.
• Small printer and other revenue also increased.
• Business profit increased on this revenue growth
•  Results were basically in line with the internal plan, partly due to foreign exchange effects.

Visual communications and Projectors

Projector demand in the education market was firm, and unit sales increased thanks to the easing of supply constraints compared to the same period last year.

• Revenue was ¥52.9 billion, up ¥7.2 billion. This was a result of an improvement in the model mix as well as foreign exchange effects.
• Segment profit ended at ¥6.7 billion, up just ¥0.3 billion compared to the same period last year, when increased inventories pushed profit upwards.
• Both revenue and segment profit were basically in line with the internal plan, in part due to foreign exchange effects.
• In manufacturing-related and wearables, we recorded ¥47.3 billion in revenue, a decrease of ¥8.6 billion.
• Revenue in manufacturing solutions decreased mainly because sales to electronic equipment manufacturers in China decreased.
• Wearable products revenue decreased on continued market softness.
• Micro devices and other revenue decreased because of a decline in unit sales of crystal devices due to market inventory adjustments.
• Segment profit fell by ¥7.8 billion to ¥0.7 billion primarily because of lower revenue in crystal devices and other businesses in the segment and soaring utility costs in semiconductor fabrication.
•  Both revenue and segment profit fell short of our internal plan.