Office-Imaging Companies’ Latest Financial Results and Forecasts
Amid the carnage caused by the COVID-19 pandemic, not only has the pandemic caused the loss of human life, but the ensuing shutdowns of businesses all over the world has resulted in plummeting revenues and earnings, beginning in about mid-March 2020. The hardest hit have been the hospitality and travel sectors. But the office-imaging – which depends on employees going to offices and printing, copying, and scanning – has also been hit hard.
In this article we look at the latest financial financial results from office-imaging companies that manufacture, source, and sell printers and MFPs, and their supplies. Keep in mind that Japanese companies have a different fiscal calendar than U.S. companies. Both the Japanese fiscal year and fourth quarter end on March 31 of year. The U.S. fiscal year and fourth quarter typically ends on December 31 of the year, while the U.S. fiscal first quarter ends on March 31.
Brother Industries
For its latest quarter, Brother reported that profits were up due to increased demand for printers for employees working at home due to the COVID-19 pandemic.
Sales revenue for the fourth quarter was ¥1,524, down 6.0 percent, but operating profit was ¥119 million, up 16.1 percent, with both versus the fourth quarter a year earlier. Net income was also up – totaling ¥80 million, – and up 8.2 percent year-over-year.
For the fourth quarter, sales revenue for Brother’s Printing & Solutions group was ¥935 million, down ¥22 million year-over-year; business profit was ¥113, up ¥23 million year-over-year; and operating profit was ¥109, up ¥19 million year-over-year.
See our complete coverage here.
Canon Inc.
Canon’s latest quarter was a difficult one. The firm reported that sales decreased by 9.5 percent year-over-year to ¥782.3 billion, while operating profit decreased by 18.7 percent year-over-year to ¥32.9 billion.
Net income decreased by 30.0 percent year-over-year to ¥21.9 billion. Basic net income attributable to Canon shareholders per share was ¥20.69 for the quarter, a year-over-year decrease of ¥8.31.
Sales of office MFP/copiers were below those of first-quarter 2019, due to delays in business negotiations and equipment installations. The decline also reflected the impact of office closures due to the spread of COVID-19.
There was a bit of a bright spot in Canon’s production-printing business, as sales grew thanks to the Canon imagePRESS C165, a new model that Canon says has been well-received by the market for its ability to provide high-speed, high-volume printing in a compact form factor.
See our complete coverage here.
Epson
For its fiscal year that ended on March 31, 2020, Epson reported ¥1,043.6 billion in revenue, a year-over-year decline of 4.2 percent. Business profit was ¥40.8 billion, a 42.0 percent year-over-year decline. Profit from operating activities was ¥39.4 billion, a 44.7 percent year-over-year decline. Profit before tax was ¥39.7 billion, a 44.9 percent year-over-year decline.
Profits were ¥7.7 billion, an 85.6 percent year-over-year decline.
For its fourth quarter that ended on March 31, 2020, Epson reported that sales decreased by approximately ¥14 billion. Profits were ¥4.0 billion, versus ¥12.1 billion for the fourth quarter a year earlier.
See our complete coverage here.
Fujifilm
HP Inc.
Konica Minolta
Konica Minolta slashed its forecast for its fiscal year that ended on March 31, 2020.
The company is now forecasting lower revenue and operating profit, as well as a a loss of ¥3,500 million.
See our complete coverage here.
Kyocera Corporation
For its fiscal year ended that ended on March 31, 2020, Kyocera’s net sales revenue was down 1.5 percent year-over-year.
Profits increased versus the previous fiscal year, but this was mainly due only to the absence of a one-time charge recorded in fiscal-year 2019 for ¥68.5 billion resulting from, among other things, structural reforms in Kyocera’s solar energy and organic-materials businesses.
As a result, operating profit increased by ¥5,370 million, or 5.7 percent, to ¥100,193 million yen; profit before income taxes increased by ¥8,216 million yen, or 5.8 percent, to ¥148,826 million; and profits increased by ¥4,511 million, or 4.4 percent, to ¥107,721 million, with all results compared to the previous fiscal year.
For its fourth quarter that ended on March 31, 2020, Kyocera reported that all financial results were down versus its third quarter. Net sales revenue was ¥402 billion yen, versus ¥397 billion for the third quarter; operating profit was ¥5.3 billion, versus ¥34.5 billion for the third quarter; and profits were ¥6.4 billion, versus ¥41.6 billion for the third quarter.
See our complete coverage here.
Ninestar Corporation
Ninestar reported revenues of 23.296 billion Chinese yuan (CNY) for its fiscal year, up 6.25 percent year-over-year, and net profits of 744 billion CNY, up 21.7 percent year-over-year.
Ninestar’s Lexmark unit reported operating income of 17.96 billion RMB, up 4.6 percent year-over-year. However, net profit was 100.59 billion RMB, a 74.8 percent year-over-year decline. Ninestar says this decline was due to U.S. tax reform, noting that Lexmark achieved a pre-tax profit of 330.18 billion RMB, a 382-percent year-over-year increase, and that this was a “first turnaround” since Lexmark was acquired by Ninestar.
For its first quarter that ended on March 31, 2020, Ninestar reported revenue of 5.24 billion CNY, up 2.17 percent year-over-year, while net profit was 30.31 billion CNY, up 66.68 percent year-over-year.
See our complete coverage here.
OKI Data
For its latest quarter, OKI’s sales were ¥457.2 billion, up 3.6 percent year-over-year, while operating income was ¥16.8 billion, down 4.0 percent year-over-year.
Notably, profits were ¥14.1 billion, up 67.6 percent year-over-year. However, this increase can be attributed to a gain on sales of assets valued at ¥4.8 billion and a gain on the sale of investment securities worth ¥4.4 billion.
For the quarter, net sales for OKI’s Printer group were ¥92.3 billion, down 10.0 percent, or ¥10.3 billion, year-over-year. Operating income for the Printer group was ¥2.8 billion, down ¥2.9 billion year-over-year.
See our complete coverage here.
Ricoh Company
For its fiscal year that ended on March 31, 2020, Ricoh reported that sales declined 0.2 percent versus the previous fiscal year to ¥2,008.5 billion. Ricoh posted ¥79.0 billion in operating profit, down 9.0 percent versus its previous fiscal year. Profits were ¥39.5 billion, down 20.2 percent versus the previous fiscal year.
For its fourth quarter that ended on March 31, 2020, Ricoh reported sales of ¥514.6 billion, down 1.7 percent year-over-year. Operating profit was ¥9.6 billion, up 25.7 percent year-over-year, but Ricoh reported a loss of ¥1.9 billion, versus a loss of ¥1.1 billion for its its fourth quarter a year earlier.
See our complete coverage here.
Sharp Corporation
For its fiscal year ended March 31, 2020, Sharp reported net sales of ¥2,271.2 billion, down 5.2 percent versus the previous fiscal year. Operating profit was ¥52.7 billion, down 37.3 percent versus the previous fiscal year. Net profit was ¥20.9 billion, down 71.8 percent versus the previous fiscal year.
For its fourth quarter, Sharp reported net sales of ¥515.6 billion, down 18 percent year-over-year; an operating profit loss of ¥13.6 billion; and a loss of ¥31.4 billion.
See our complete coverage here.
Xerox
For its first quarter, Xerox reported $1.86 billion in revenue, down 14.7 percent year-over-year.
It also reported a loss of $0.03 per share, down $0.37 year-over-year, and a net loss of $2 million. Operating income was $87 million, down 63.6 percent year-over-year.
See our complete coverage here.
Forecasts
Due to the uncertainty created by COVID-19, no companies have released a financial forecast.
Our Take
The big surprise among these results is Brother, which actually posted positive results for its latest quarter (thanks to its home-office presence) Meanwhile, we’re waiting for one of the largest players – HP Inc. – to report its first-quarter results, which it’s scheduled to report on May 27th.
As for the future, we can expect lots of ups-and-down. Both HP and Xerox management have noted that their companies will continue to see lower financial results into the second quarter.
This second quarter, running from April 1 to June 30, is likely to be even worse for office-imaging companies, as more time in the second quarter was spent lockdowns than in the January to March quarter.
The good news is that lockdowns should ease by at least the beginning of the third quarter, and as several analysts have noted, unlike with the 2008 “credit-crunch” recession, there is no structural problem with the economy. Still, it will be rough going for many office-imaging companies.
More Resources
May 2020: Office-Imaging Companies’ Share Prices Take Big COVID-19 Hit