OEMs Deliver Mixed Results as They Strive to Manage Declining Demand for Print

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In April and May, original equipment manufacturers (OEMs) and vendors of single-function printers and multifunction printers (MFPs) announced their financial results for the three-month period ended March 31, 2024.

The quarter was a mixed one, with some OEMs reporting revenue and profit growth in their printing business but other OEMs reporting declines. Notably, every single vendor that reported growth is based in Japan and benefited significantly from the yen’s depreciation. If not for favorable foreign currency exchange (FOREX), more vendors would have been reporting downturns in their printing businesses. While the quarters ended in December 2022, March 2023, and June 2023 were marked by upticks in A3 hardware shipments as vendors recovered from severe product shortages and fulfilled order backlogs, A3 product backlogs have now normalized, and most vendors saw flat to declining A3 shipments. Moreover, demand is down for A4 devices as well. IDC reported that for Q1 2024 (January 1 to March 31, 2024), global hardcopy peripheral shipments dropped an astounding 17.6 percent (see “IDC Says Worldwide Hardcopy Peripheral Shipments Declined in Q1 2024 for Fourth Straight Quarter”). Vendors pointed to a myriad of challenges negatively impacting hardware demand, including a tough comparison to the year-ago quarter in which many vendors fulfilled order backlogs, digital transformation replacing the need for print, competitive pressure, higher interest rates depressing corporate investment in hardware, and uncertain economies in China and Europe.

While some vendors (Brother, Canon, and Epson) reported improved supplies or non-hardware sales in the quarter, others (HP, Konica Minolta, Ricoh, and Xerox) reported declines. Of course, other OEMs said nothing whatsoever about their supplies businesses. Ninestar did not comment on how Lexmark or Pantum supplies fared, but did say its general consumables business, which manufactures and sells third-party supplies, had a very modest revenue decrease but improved profits. That’s a strong performance for this business considering the United States has banned importation of products made by certain Ninestar companies (see “Ninestar Imports Banned by U.S. Government Due to Forced Labor Concerns”).

With the print industry under pressure, many OEMs are focusing on alliances, restructuring, and cost cutting. Last year, Ricoh and Toshiba Tec announced that were teaming up on joint venture called ETRIA for product development and manufacturing (see “Ricoh and Toshiba Tec Confirm Business Partnership to Manufacture MFPs”). That joint venture is slated to commence operations this summer. More recently, in April, Fujifilm and Konica Minolta announced an alliance (see “Fujifilm and Konica Minolta Are Exploring Joint Venture and Potential Alliances”). The first piece of the alliance will be a joint venture for procurement of parts and materials. The next piece will be “the establishment of structures for toner development/production and supply.” Fujifilm also unveiled plans to grow the Business Innovation segment by moving the Graphic Communications business into the segment, growing in A3 color, and expanding sales in Europe (see “Fujifilm Unveils VISION2030 Plan and Financial Targets”). Konica Minolta announced organizational restructuring along with changes to its leadership that went into effect on April 1 (see “Konica Minolta Unveils Broad Organizational and Leadership Changes”). HP is continuing with its Future Ready initiative and Xerox its Reinvention restructuring plan. Xerox announced that as part of its plan, it will be discontinuing manufacturing of the Xerox iGen 5 Press and Xerox Nuvera presses.

Performance by Vendor

Actionable Intelligence currently covers financial results for the following printer OEMs: Brother, Canon, Epson, Fujifilm, HP, Konica Minolta, Kyocera, Ninestar, Ricoh, Sharp, Toshiba Tec, and Xerox. For all the Japanese OEMs, except Canon, the period from January 1, 2024, through March 31, 2024, was the fourth quarter. For Canon, U.S.-based Xerox, and China-based Ninestar, this period was the first quarter of fiscal 2024. HP is on a different financial calendar than all the other OEMs. Its second quarter of fiscal 2024 ran from February 1, 2024, through April 30, 2024.

Here, we look specifically at the performance of OEMs’ business segments that include home and office printer hardware, supplies, and related software and services.

Figure 1 presents a snapshot of the financial performance of OEMs’ printing businesses for their most recent quarter.

Figure 2 shows how OEMs’ printing businesses fared in terms of year-over-year revenue and profit growth or declines in their most recent quarter. Last quarter, seven of the vendors we cover saw both revenue and profit growth in their printing businesses (Brother Printing and Solutions, Canon Printing, Epson Printing Solutions, Kyocera Document Solutions, Ricoh Digital Services, Sharp Smart Office Business, and Toshiba Tec Workplace Solutions) (see “Most OEMs See Improved or Mixed Results in Latest Quarter”). This quarter, seven OEMs also saw revenue and profit growth in their printing segments, but the roster changed slightly: Epson Printing Solutions dropped off the list of companies posting growth and Konica Minolta Digital Workplace joined the list. This quarter, one vendor, Fujifilm Business Innovation, reported mixed results—slightly higher revenue but lower profits. Four vendors, Epson printing Solution, HP Printing, Ninestar, and Xerox Print and Other, reported shrinking revenue and profits. That’s up from last quarter when only two vendors (HP Printing and Konica Minolta Digital Workplace) reported revenue and profit declines in their printing businesses.

Figures 3 and 4 show these same year-over-year percentage changes separately. Figure 3 shows year-over-year revenue growth or decline for the quarter. The leader this quarter in terms of revenue growth was Toshiba Tec Workplace Solutions, the only vendor to report double-digit revenue growth. In general, those vendors reporting revenue growth saw higher growth in the latest quarter than they did the previous quarter. This quarter, average revenue growth was 1.6 percent, up from 0.3 percent in the quarter ended in December 2023. However, two of the vendors reporting revenue decreases, including HP Printing and Xerox Print and Other, reported bigger decreases this quarter than last.

While fewer vendors saw improved profits this quarter than last (seven vendors versus nine), many of those that did report profit growth saw big surges. Notably, Brother Printing Solutions and Toshiba Tec Workplace Solutions posted triple-digit improvements, while Kyocera Document Solutions, Canon Printing, Konica Minolta Digital Workplace Solutions, and Sharp Smart Office Business could boast of double-digit percentage increases. HP reported a bigger downturn in Printing profit this quarter than last quarter, but the companies that saw the biggest downturns in profits were Ninestar and Xerox Print and Other. Xerox Print and Other also saw the biggest profit decline last quarter as well.

Figure 5 shows how much revenue in U.S. dollars each OEM’s printing business generated in the quarter ended March 31, 2024. While last quarter Canon brought in more revenue than did HP, in the latest quarter HP once again took back its customary top spot. One other change we noted is that while last quarter Xerox Print and Other brought in more revenue than Fujifilm Business Innovation, this quarter the reverse was true. This chart also illustrates that percentage increases/decreases in revenue don’t always have much impact on a vendors ranking in terms of revenue in dollars. HP Printing remains the top vendor in terms of revenue in dollars despite its year-over-year revenue decline; Toshiba Tec Workplace Solutions brought in the least revenue despite seeing the strongest-year-over-year growth.

Figure 6 shows the OEMs’ printer segment profits in U.S. dollars. Similar to what we see with revenue in dollars, this chart exemplifies the fact that big percentage increases in profit don’t always translate into big profits. Brother Printing and Solutions saw the highest percentage increase in profit, but it is ranked in the middle of the pack in terms of profit in terms of actual dollars. Toshiba Tec Workplace Solutions saw the second-highest percentage increase in profit but ranks dead last in terms of operating profit in dollars. Meanwhile, HP saw the third-largest drop in operating profit, but continues to bring in more profit in dollars than all the competition. Notable changes this quarter are that Kyocera Document Solutions moved up the ranking to bring in the fifth most profit (last quarter it was ranked ninth). Conversely, Brother Printing and Solutions moved down. This quarter, it was ranked eighth in terms of total operating profit in dollars, while last quarter it was number five. Konica Minolta Digital Workplace also moved up in the ranking to number six this quarter from number eight last quarter. Xerox’s ranking dropped. This quarter it brought in the second-to-least amount of profit, while last quarter it was in the middle of the pack.

Lastly, Figure 7 compares printing segment profit margin for each of the vendors. Despite the less-than-great performance of its Printing business in recent quarters, HP has managed to maintain industry-leading margin and the same was true in its latest quarter, with the company boasting a margin of 19.0 percent. Surprisingly, Kyocera Document Solutions could boast of the second-largest operating profit margin. In previous quarters, it has ranked in the middle. Canon Printing was ranked third. The same two vendors have the most meager margins in recent quarters: Ricoh Digital Services and Xerox Print and Other.

Below we have summarized the performance of the various OEMs we track, keeping the focus on their home and office hardware and supplies businesses. For more information, click on the links below to access our detailed coverage of these companies’ financial results.

Brother: While Brother’s companywide revenue grew in Q4 2023, the company recorded a surprise impairment loss in the firm’s Domino business in the quarter, resulting in operating and net losses for the quarter. News, however, was more upbeat in the Printing and Solutions segment, which saw its revenue grow 7.4 percent in Q4, largely on an uptick in consumables sales. Laser hardware revenue fell 1 percent year-over-year in Q4, but laser consumables revenue improved 18 percent. In Q4 2023, inkjet hardware revenue dropped 1 percent, and inkjet consumables revenue rose 5 percent. Operating profit in the Printing and Solutions segment surged 213.7 percent due to the improvement in consumables sales, price adjustments, and lower logistics costs.

Canon: Canon had a mixed start to the year. In Q1 2024, net sales increased very modestly and net profit improved, but operating profit declined. The performance of the Printing business was good, however. Net sales in this segment increased 4.0 percent year-over-year, and Printing operating profit increased 29.4 percent. In Q1 2024, Office net sales grew 9.1 percent year-over-year with office MFD net sales improving 8.8 percent and other sales growing 9.7 percent. Office MFD hardware net sales grew 4 percent even though unit growth was down 6 percent, and office non-hardware net sales improved 14 percent. In contrast with the Office subsegment, Prosumer net sales dropped 4.7 percent in Q1. Laser printer net sales fell 3.7 percent due to weakness on the hardware side of the business. Laser printer hardware net sales contracted 15 percent on a 16 percent decline in unit shipments.  In contrast, laser non-hardware net sales improved 4 percent. Inkjet printer net sales declined 6.3 percent year-over-year in Q1 2024. Canon reported a 14 percent decline in inkjet hardware net sales, a 17 percent decline in inkjet printer units, and a more modest 1 percent dip in inkjet non-hardware net sales.

Epson: Epson saw companywide revenue shrink and operating and net profit tumble in the final quarter of FY 2023. Q4 2023 was one of the weaker performances we have seen in Epson’s Printing Solutions business in quite some time. After delivering year-over-year revenue growth for 13 consecutive quarters, Printing Solutions revenue contracted 4.1 percent in Q4 2023, and segment business profit dropped 2.2 percent, the second straight quarter of profit declines in this business. In Q4 2023, Office and Home Printing revenue dropped 7.2 percent, but business profit in this group improved 2.7 percent. Epson noted SOHO and home inkjet printer revenue fell 7.6 percent in Q4 2023 due to lower unit sales and a decline in average selling prices. After growing for seven straight quarters, Epson’s office-shared inkjet printer revenue fell 3.4 percent in Q4 2023. In Q4, ink revenue rose 3 percent year-over-year.

Fujifilm: In Q4 2023, Fujifilm celebrated growth and record highs for revenue, operating income, and net income. The performance of the Business Innovation segment, however, was mixed, with revenue up a modest 0.4 percent and operating income decreasing 6.2 percent. Revenue in the business solutions subsegment increased 2.1 percent year-over-year in the quarter, but the office solutions group that is responsible for printers, MFPs, and supplies saw revenue shrink 0.7 percent. Fujifilm laid the blame for this on “lower exports to Europe and the U.S., despite expansion of OEM supply, the effect of worldwide sales price revisions, and other favorable factors.” When Fujifilm discusses exports of office solutions to Europe and the United States, it mainly means its sales to Xerox, and Xerox reported sharp declines in equipment sales in the quarter.

HP: In Q2 2023, HP’s revenue continued to decline and net earnings fell, but operating profit increased. The bright spot for the company was that Personal Systems sales finally grew for the first time in two years. The Printing segment, however, posted declines. Revenue and operating profit in the Printing business each dropped 7.8 percent year-over-year. In Q2 2023, supplies revenue fell 4.7 percent year-over-year. In the Printing segment, commercial revenue dropped 12.2 percent and consumer revenue fell 16.2 percent. Printing hardware units were down 17 percent, with the exact same decline seen in both consumer and commercial units.

Konica Minolta: In Q4 2023, Konica Minolta saw revenue, operating profit, and net profit grow. In the Digital Workplace Business in Q4 2023, revenue rose a slight 0.7 percent compared to Q4 2022, but operating profit surged 23.9 percent. In the office printing subsegment, revenue fell 1.4 percent. Office hardware revenue was down 2 percent, but non-hardware revenue dropped 15 percent. In contrast, in Q4 2023, DW-DX revenue rose 14.4 percent.

Kyocera: Q4 was actually one of Kyocera’s better quarters in an overall downbeat year. Revenue and net profit grew year-over-year, but operating profit decreased. It has been an upbeat year and quarter for the company’s Document Solutions group. In Q4, Document Solutions revenue increased 8.4 percent. While revenue in this segment has been growing all year, the top-line growth posted in Q4 was the highest percentage increase of the year. Kyocera said revenue increased due to increased sales of products, stronger demand for services, and the weak yen. In Q4, the Document Solutions unit’s business profit grew a robust 30.4 percent compared with the year-ago period.

Ninestar: In Q1 2024, Ninestar’s revenue decreased 3.5 percent and operating profit fell 41.3 percent; however, the firm’s net profit improved 31.3 percent. Lexmark’s revenue increased 1.7 percent, and Lexmark’s printer unit sales increased 22.1 percent. (Lexmark had an easy comparison as printer unit sales dropped 16.9 percent in the year-ago period.) Lexmark’s earnings before interest, taxes, depreciation and amortization (EBITDA), however, dropped about 45.0 percent. The company explained that Lexmark’s growth in hardware sales “put pressure on profitability in the current report.” Pantum saw its revenue shrink 20.2 percent, but net profit improved 21.9 percent. Pantum’s sales of printer units fell 33.9 percent, but A3 was a bright spot—shipments in this category rose about 40 percent. Ninestar reported mixed results in its general consumables business, which manufactures and sells third-party supplies. Revenue in this business dropped less than 1 percent, but net profit improved 6.4 percent.

Ricoh: In Q4 2023, Ricoh’s net sales improved, but operating and net profit sank by double-digits. In the Digital Services business in the quarter, net sales rose 6.5 percent and operating profit increased 1.8 percent. Unfortunately, Ricoh did not provide Office Printing net sales for the quarter, but for the full year Office Printing net sales increased 5.0 percent. Ricoh said the supply shortages it has seen centered on A4 MFPs were resolved, it has been able to pass along its own cost increases to customers in the form of higher prices, the firm saw improved mix shift, and it benefited from the weak yen. Office Printing non-hardware sales were down 1 percent in Q4 2023.

Sharp: Q4 2023 was a decidedly downbeat quarter for Sharp. The company reported a revenue decline and operating and net losses due to impairment losses taken in the Display Device segment, and the firm announced it would be shutting down its Sakai Display Products factory, which makes large-screen LCD panels for TVs. Despite all the doom and gloom, it was a good quarter for the Smart Office business. In Q4 2023, Smart Office net sales rose 8.8 percent and operating profit increased 15.1 percent. Sharp attributed the business’s top-line growth to higher sales in the MFP business, the office solutions business, and the domestic PC business.

Toshiba Tec: In Q4 2023, Toshiba Tec’s net sales and operating profit rose; however, the company posted a full-year net loss due to the reversal of deferred tax assets. The company’s Workplace Solutions business continued to perform well, however. In Q4 2023, Workplace Solutions net sales improved 11.3 percent and operating profit surged 204.9 percent. Toshiba Tec said net sales of MFPs increased due to the impact of FOREX and strong sales in the Americas, Europe, and other regions.

Xerox: Xerox reported a weak start to fiscal 2024. In Q1 2024, revenue and operating profits plunged, and the firm reported a net loss for the quarter due largely to charges related to the firm’s Reinvention restructuring plan. In Xerox’s Print and Other segment, revenue was down 12.6 percent and operating profit dropped 67.0 percent. In Q1 2023, equipment revenue tumbled 25.8 percent year-over-year. There were no pockets of equipment sales growth to which Xerox could point as a bright spot. Revenue in the entry-level segment fell 27.4 percent. Total entry-level installs in the quarter were down a steep 44 percent (down 47 percent for monochrome devices and down 37 percent for color). Midrange equipment sales declined 23.4 percent. Midrange installs were down 21 percent (down 28 percent for black-and-white devices and down 18 percent for color). The high-end equipment business saw revenue plummet 35.6 percent as installs fell 40 percent (the decline was 22 percent for black-and-white units and 42 percent for color). Moreover, post-sale revenue in Q1 2023 decreased 8.5 percent.

Forecast Changes

This quarter we saw eight vendors that just ended their fiscal years, including Brother, Epson, Fujifilm, Konica Minolta, Kyocera, Ricoh, Sharp, and Toshiba Tec, post new forecasts for FY 2024. As Figure 8 shows, four of these vendors (Brother, Kyocera, Ricoh, and Toshiba Tec) expect to post companywide revenue, operating profit, and net profit growth in the year ahead. Epson and Fujifilm both expect higher revenue and operating profit but lower net profit. Konica Minolta forecast flat revenue but lower operating and net profit due to restructuring costs. Sharp expects lower revenue but improved operating and net profit.

Of the other vendors, Canon and Xerox left their FY 2024 forecasts unchanged. HP lowered its outlook for GAAP EPS.

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. Actionable Intelligence also recently published a detailed 12-month FY 2023 comparison for OEMs (see “Who’s Up, Who’s Down: A Comparison of Printer OEM Financial Results for FY 2023”).

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