EPSON TO RAISE $393MIL WITH COST-CUT PLAN

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EPSON TO RAISE $393MIL WITH COST-CUT PLAN

 user 2006-03-21 at 10:19:00 am Views: 66
  • #15121

    Seiko Epson to Book 46.3 Bln Yen for Cost-Cut Plan
    March 06– Seiko Epson Corp., the world’s second-biggest printer maker, will book 46.3 billion yen ($393 million) for restructuring costs this fiscal year as the company eliminates jobs and cuts production lines at its chip unit.
    The company will book a further 3 billion yen in the next business year ending March 31, 2007, President Seiji Hanaoka said at a media conference in Tokyo today. Suwa, Nagano-based Seiko Epson made the projections as part of its mid-term business plan.
    Seiko Epson is planning to cut its workforce in Japan by 11 percent over three years and slim down some of its factories as prices of semiconductors and flat-panel displays fall. Sales of printer ink and paper fell more than expected this year on increased competition from Canon Inc. and Hewlett-Packard Co.
    The restructuring plan will help add 64 billion yen to the company’s net income by March 2009, Hanaoka said.
    The company, which also makes cell-phone displays and chips, yesterday widened its full-year net loss forecast by 64 percent to 23 billion yen, citing a charge to write down the value of assets at a chip factory. The company reported a 55.7 billion profit a year ago. It kept sales, operating income and pretax profit forecasts for this fiscal year.
    Seiko Epson said in January it would eliminate 3,000 jobs in Japan over the next three years and book at least 42 billion yen to reflect declines in the value of assets in its electronics device unit. Today, the company said it eliminate about 100 jobs at its European office equipment operations.
    Three-Year Plan
    Sales in the next three years are expected to rise 7.5 percent to 1.67 trillion yen, Hanaoka said. For the next fiscal year starting April 1, sales will reach 1.59 trillion yen.
    The electronic devices unit, including cell phone displays and LCD chips, is projected to post an operating profit of 15 billion yen for the year ending March 2008, compared with a forecast for a 1 billion yen loss next fiscal year.
    Operating profit, or sales minus the cost of goods sold and administrative expenses, for the unit is expected to rise to 25 billion yen in the year ending March 2009.