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Seiko Epson profit up, sees further
rise
TOKYO, MAI 05 – Seiko Epson Corp. said
on Tuesday its annual operating profit rose 17.5 percent as healthy sales and
cost cuts in its printer division offset sluggish demand for devices, and it
forecast a slightly better-than-expected 1 percent rise in earnings this year.
Driving profits higher were robust sales of photo printers and multi-function
ink jet printers, so-called because they can also copy and scan. It has also cut
production costs in the printer division by using more common parts and other
means.
Seiko Epson, the world’s second-largest maker of ink jet printers after
Hewlett-Packard , forecast its operating profit would rise 1.1 percent to 92
billion yen in the year ending March 2006.
Analysts had expected a profit of 90.6 billion yen, according to 13 forecasts
compiled by Reuters Estimates.
“Most of that will come from our information equipment business … which is
seeing a fast recovery in profit,” said Toshio Kimura, chief financial officer
for Seiko Epson.
The information equipment business is the company’s biggest unit and includes
printers, scanners and projectors.
The Nagano-based company posted a group operating profit of 90.97 billion yen
($860.6 million) for the year that ended on March 31, compared with a 77.4
billion yen profit the year before.
Last month Seiko Epson cut its 2004/05 operating profit forecast by 23
percent to 90 billion yen because of lower-than-expected sales of ink and other
printer consumables and of liquid crystal displays used in cellphones and PCs.
It has been dogged by weak demand for larger amorphous thin film transistor
(TFT) LCDs. Used in PCs and monitors, this type of LCD was added to its
portfolio through a merger of its LCD operations with those of Sanyo Electric
last year.
However, an upbeat earnings report last week from top mobile phone maker and
key customer Nokia offered a ray of hope for Seiko Epson’s small LCD panels.
Seiko Epson is the world’s third-largest maker of small- and medium-sized LCDs.
Kimura told reporters that the unit that makes the LCD panels would probably
be in the red in the first half of the year, but the company aimed for it to
recover in the second half and be profitable for the full year.
Before the announcement, Seiko Epson’s stock ended up 0.8 percent at 3,630
yen, while the Tokyo stock market’s electric machinery index fell 0.6 percent.
Shares in Seiko Epson fell 5.2 percent in the year ended March 31,
outperforming the Tokyo stock market’s electric machinery index, which lost 7.3
percent. ($1=105.70 Yen) (Additional reporting by Kiyoshi Takenaka)
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