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Seiko Epson cuts profit forecast 46%
September 2005
TOKYO: Japanese
electronics maker Seiko Epson Corp yesterday slashed its operating
profit forecast by 46 per cent for this business year, underscoring a
slide in prices and sales of display panels and ink jet printers.Seiko Epson, the world’s second-largest maker of ink jet printers after
Hewlett-Packard Co, forecast a group operating profit for the year
ending next March of 44 billion yen ($NZ570 million), down from the 82
billion yen it estimated in late July.That compares with a consensus operating profit forecast of 77 billion
yen according to 18 analysts surveyed by Reuters Estimates. The company
posted 91 billion yen in operating profit in 2004/05.The Nagano-based company projected that its electronic devices unit
would swing to a full-year operating loss of 10 billion yen compared
with its previous forecast for a 19 billion yen profit, due to an
anticipated sharper slide in sales and prices of thin film transistor
liquid crystal display panels.The electronics devices unit generated about 42 per cent of Seiko Epson’s group operating profit in 2004/05.
The company has been dogged by sliding prices of small LCD panels used
in mobile phones and intense price competition with rivals Sharp Corp,
an LCD joint venture between Toshiba Corp. and Matsush*ta Electric
Industrial Co Ltd and South Korea’s Samsung Electronics Co Ltd.Also battered by lower sales of consumables such as ink cartridges and
sliding prices of ink jet printers, Seiko Epson cut its full-year
operating profit for its information-related equipment unit by 12 per
cent to 65 billion yen.For 2005/06, the company now forecasts a group net profit of 22 billion
yen on revenue of 1.618 trillion yen, compared with its previous
forecasts of 44 billion yen in net profit on sales of 1.639 trillion
yen.For the six months to September 30, the company projects group
operating profit of 4.5 billion yen on revenue of 726 billion yen,
compared with its previous estimate of 7 billion yen in operating
profit on revenue of 728 billion yen. It also widened its first-half
net loss outlook to 2 billion yen from 1 billion yen.Before the announcement, shares in Seiko Epson closed down 1.41 per
cent at 3500 yen, compared with a 0.37 per cent rise in Nikkei share
average
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