The Big Picture: OEM Financials for the Quarter Ended in March 2019

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At the end of April and throughout May, printer and copier OEMs reported quarterly financial results for the three-month period ended on March 31, 2019. For all the Japanese OEMs, except Canon, this period was the fourth quarter and the end of their fiscal years. For Canon and Xerox, this period was the first quarter of the fiscal year that will end on December 31, 2019. HP is on a different financial calendar than all the other OEMs. Its second quarter ended on April 30, 2019.

With this financial period, Actionable Intelligence added coverage of two additional OEMs—Kyocera and Sharp. Actionable Intelligence thus currently covers financial results from BrotherCanonEpsonFujifilmHPKonica Minolta, KyoceraOKIRicohSharpToshiba Tec, and Xerox. (On the aftermarket side of the industry, we currently cover Ninestar and Turbon.) Our detailed coverage of these companies’ financial performance is available for Actionable Intelligence subscribers.

Key takeaways from OEMs’ most recent financial quarters are as follows.

  • In general, the quarter ended in March 2019 proved to be a more challenging quarter for many OEMs’ printing businesses than the previous few quarters. Many firms reported being negatively impacted by declining demand for certain product categories, foreign currency exchange (FOREX), and U.S./China trade friction and the resulting slowdown in the Chinese market.
  • In the quarter ended in December, the list of “winners”—firms whose printing businesses posted both revenue and operating income growth year-over-year—was small and included only Konica Minolta’s Professional Print business and Ricoh’s Commercial Printing business. Those are the same two printing businesses that reported growth last quarter as well. It is a sign that the production printing space remains healthier than lower-volume segments. Meanwhile, Fujifilm’s Document Solutions business reported very modest revenue growth and flat operating profit, which was enough to outperform many peers.

  • The roster of OEMs reporting a mixed quarter included HP’s Printing business, which saw revenue decline but posted very slight operating profit growth (0.2 percent); Kyocera’s Document Solutions business, which saw revenue shrink but operating profits grow; Ricoh’s Office Printing group, which saw revenue decline but reported a big increase in operating profit that erased last year’s losses; and Xerox, which saw revenue decline sharply but posted improved operating profits.
  • The printing businesses that delivered the worst performances in the quarter and saw both revenue and profits decrease included Brother’s Printing and Solutions business, Canon’s Imaging Systems business, Canon’s Office business, Epson’s Printing Solutions business, Konica Minolta’s Office business, Sharp’s Smart Business Solutions group, and Toshiba Tec’s Printing Solutions segment. That is one of the longer lists of printing businesses reporting revenue and profit declines we have posted recently.
  • Of the 12 major OEMs we track, nine (Brother, Epson, Fujifilm, Konica Minolta, Kyocera, OKI, Ricoh, Sharp, and Toshiba Tec) provided their initial forecasts for the fiscal year ending in March 2020. Brother’s and Epson’s forecasts are downbeat—the two firms are projecting modest revenue growth and bigger profit declines. In contrast, Fujifilm, Konica Minolta, Kyocera, OKI, Sharp, and Toshiba Tec are all projecting both revenue and profit growth in the year ahead. Meanwhile Ricoh expects a very modest revenue decrease but double-digit profit growth.
  • Canon revised its forecast downward significantly. As a result, of all the Japanese OEMs, Canon is now projecting the gloomiest FY 2019.
  • The two U.S. OEMs, HP and Xerox, provide less forecast information than their rivals, but both companies raised their earnings per share (EPS) guidance for the year.

If you want the most up-to-date information on printer OEMs’ financial performance, legal issues, new product introductions, and other topics impacting the printer and MFP hardware and supplies industry, subscribe to Actionable Intelligence.

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