EPSON EXPECTS NET LOSS OF $155M.

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EPSON EXPECTS NET LOSS OF $155M.

 user 2007-03-20 at 9:31:00 am Views: 54
  • #17663

    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.