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Epson swings to profit in Q1 on cost cuts
TOKYO,
July 26 – Seiko Epson Corp. said on Wednesday it swung to a profit in
the latest quarter as it phased out low-end ink jet printers that were
eating into earnings, and kept its full year forecast for a 55 percent
profit gain.Seiko Epson, the world’s second-largest ink jet printer
maker after Hewlett-Packard , has been overhauling its printer line-up
to reduce cheaper models that don’t consume a lot of ink and are
particularly susceptible to price declines.That strategy appears to be
paying off.”There are some differences among each of our businesses but
overall we are off to a good start,” Kenji Kubota, a managing director
at Seiko Epson, told a news conference.Seiko Epson reported a group
operating profit of 7.01 billion yen ($59.9 million) in the three
months to June 30, a sharp turnaround from a loss of 5.04 billion yen
in the same quarter last year. Sales fell 5.3 percent to 322.04 billion
yen.The quarterly profit performance handily beat the average of 4
analysts polled by Reuters for a loss of 2.15 billion yen.Seiko Epson,
which also makes small liquid crystal displays and chips for mobile
phones, stood by its forecast for an operating profit of 40 billion yen
in the full year to March, up from a 25.7 billion yen profit in the
prior year.Operating income in its information equipment division,
which handles ink jet printers and laser printers, rose to 14.1 billion
yen in the April-June period from a 4.2 billion yen profit a year
earlier, also helped by lower marketing costs.Its electronic devices
division remained in the red with a loss of 5.3 billion yen, as
revenues tumbled due to sliding prices of LCDs and weaker sales in its
chip operations, which embarked on a large-scale restructuring earlier
this year.
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