Epson slides further into the red

Some categories still growing but year-on-year loss accelerates

Seiko Epson Corporation reported losses of 34.5m yen (£282,000) in Q1 of 2012 in the wake of a year characterised by shrinking or sluggish demand in many segments.

For the three months ending 30 June 2012, the Japan-headquartered manufacturer notched up net sales of 186.4m yen – 14.4 per cent down on the same quarter a year ago, when the global vendor sold 217.7m yen of kit, which worked out as a small net loss of 3.2m yen.

"In Europe, the economy maintained a holding pattern due to factors such as high unemployment and uncertainty. In Asia, China posted growth on increased internal demand but saw the pace of expansion slow," said Epson in its announcement to investors. "Extraordinary losses in the first quarter included a 13.3m yen loss on litigation."

Seven vendors – including Epson Imaging – settled accusations of being part of an alleged LCD price-fixing cartel out of court in the US for $553m (£353m) in December, according to media reports. The suit against the remaining defendants, including Toshiba, LG Display and AU Optronics, continues.

The vendor's latest annual report, covering April 2011 to March 2012, notes that civil actions have been brought against the company and certain of its consolidated subsidiaries by "multiple customers in multiple countries", regarding allegations of involvement in such a cartel.

"It is difficult at this time to predict the outcome of these civil actions and when they may be settled," it said.

Epson's German subsidiary is also still defending an unrelated case in the Court of Justice of the EU, the annual report said.

Product demand soft or slowing

According to Epson's Q1 statement, demand was soft or slowing across most product categories, including printers, PCs, TVs and watches, with a slender growth rate seen in segments such as cameras, robots, mobile handsets, POS products, applications and visual products including projectors.

"The printer business as a whole reported a decline in net sales. Inkjet printer unit shipments increased compared to the same period last year," said Epson. "Sales of consumables, on the other hand, declined. Unit shipments of large-format printers increased owing to growth of low-end models in Europe, the Americas and Asia. However, sales of higher-price models were sluggish, cancelling out the effect of greater volume."

The vendor said it has, however, reduced its overall liabilities slightly as well as its assets, and is continuing with its current three-year plan, which aims to transform the company into "a community of robust businesses".

"The Epson Group is looking to channel its collective energy into coping with a difficult business environment, including uncertainty about the financial future in Europe and a strong yen, to accelerate the speed with which it executes business strategies, and to establish a reliable map for achieving its SE15 [mid-range business plan 2012-2014] vision," the statement said.