Consolidated Results for the Third Quarter Ended December 31, 2010

Q&A summary

Click on the appropriate question to view the answer.

Overall

Q1
What actions is Epson taking as it looks towards the next fiscal year?
A
We are now approaching the end of the second year of the first three-year mid-range business plan that was established to achieve Epson's SE15 Long-Range Corporate Vision. Our most important target for this fiscal year is to make a profit in net income, and achieving this target is now in sight. Our plans for the third year of the mid-range business plan will call for a return to past profit levels, to go back to a solid growth path, and to provide a firm foundation for the next mid-range business plan.
Q2
Although you have left your annual operating income target unchanged, you have changed the breakdown among the segments. Does this represent the difference between the previous outlook for the third quarter and the actual results?
A
Yes, that is mainly the case.
We changed the breakdown among the segments because of the slower than expected recovery in the information-related equipment segment, the situation in electronic devices, and also the trends in corporate expenses.
Q3
Name three businesses that you expect to drive an increase in profitability next fiscal year?
A
We have high expectations for business systems, printers for commerce and industry, and projectors.
In business systems, although the investment by POS customers in the US is still sluggish, we believe the recovery is not far off. Sales of printers for commerce and industry, and for projectors are steady, and we are looking to grow both sales and income in these areas.
Q4
How do you see SGA expenses in the fourth quarter and the following fiscal year?
A
Given the results of the third quarter selling season, it's possible that we may increase promotion expenses in the fourth quarter. However, we don't see a significant change in SGA expenses as a proportion of net sales.
We are still in the process of putting together the plan for the next fiscal year, but the proportion of SGA expenses to net sales is unlikely to change.

Information-related equipment

Q5
How do you see the prospects for the inkjet printer market, and what is the latest situation for Epson?
A
Although the situation varies among regions, we do not in general see any significant changes in the market. Epson's third quarter results in inkjet printers were similar to the previous year. The market recovery in the US and Europe was slower than expected, and we decided not to follow competitors' price cutting in some regions and with some models.

Electronic devices

Q6
This segment has been in the black recently. Why are you forecasting a loss in the fourth quarter?
A
This forecast was made after considering seasonal fluctuations in demand and the impact of the strong yen.
Q7
Although the accumulated extraordinary loss for the third quarter is approximately 7.4 billion yen, you haven't changed the full-year outlook for a 12 billion yen extraordinary loss. Do you expect any additional extraordinary losses to arise in the fourth quarter?
A
We have included all currently recognizable extraordinary losses forecast this fiscal year in the small- and medium-sized display business in the third quarter results. However, we have left our full-year forecast unchanged because there is the possibility of more of such losses occurring before the end of the fiscal year.