*NEWS*EPSON EXPECTS NET LOSS OF $155M.

[Anonymous]

Seiko Epson Says Expects Net Loss in 2006/7
TOKYO 
Japanese electronics maker Seiko Epson Corp.  said on Wednesday it
expects to post its second straight annual loss after writing down the
value of its struggling display business.The company has taken steps to
improve profits at its mainstay printer division, but its display unit
has been under pressure due to tumbling prices of its small
liquid-crystal displays (LCD) used in mobile phones.Seiko Epson, the
world’s second-largest ink jet printer maker after Hewlett-Packard Co.
, said it expects to post a net loss of 18 billion yen ($155 million)
for the year to March 31, compared with its previous profit projection
of 14 billion yen.The company attributed the downturn to a 40.6 billion
yen asset impairment loss in its display division, which it expects to
generate 21.5 billion yen in fixed-costs savings over the next three
years.Until earlier this year, the display unit was 45 percent owned by
struggling consumer electronics maker Sanyo Electric Co. But Seiko
Epson bought out Sanyo’s stake to help speed the reorganization.Seiko
Epson announced a bigger revamp scheme for display and chip businesses
last year, which included more than 3,000 job cuts and a one-time
charge of 46 billion yen.”Price declines were within expectations, but
sales failed to reach our target because we weren’t able to shift our
resources quickly enough to develop displays that matched customer
needs,” Seiko Epson Chief Executive Seiji Hanaoka told reporters.

Seiko
Epson’s electronic devices business, which includes displays and
semiconductors, is expected to post an operating loss of 25 billion yen
this year, which compares with a loss of 9.7 billion yen a year
earlier.To recover earnings, Hanaoka said the company will continue
investing in two types of displays geared for high-end devices such as
smartphones and car navigation systems, while move the production of a
type of lower-end display from Japan to China to cut costs, and exit
from another display technology by 2007/8.”We had stuck to offer four
different types of displays to match diverse needs, but that actually
spread our resouces too thin,” Hanaoka said.Hanaoka said he expects the
small- and mid-sized LCD business to return profitability in the year
starting April 2008The company also raised its 2006/07 operating profit
forecast by 25 percent to 50 billion yen on higher sales and cost
cuts.But competition in the printer business is intensifying with
rivals such as Canon Inc. rolling our new models and demand slowing in
mature markets like Japan.Ahead of the announcement, shares of Seiko
Epson closed down 5.4 percent at 3,180 yen due to a newspaper report of
the loss. The benchmark Nikkei average fell 2.92 percent.

[Author]

March 20, 2007 at 9:30 AM