Seiko Epson (6724) 1Q results: Mixed by business, but full-year guidance raised on tariff refunds; share buyback also announced

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

05 August 2026

Seiko Epson (6724)

1Q results: Mixed by business, but full-year guidance

raised on tariff refunds; share buyback also announced

Somewhat positive: 1Q operating profit was ¥20.6 billion (Bloomberg consensus

estimate: ¥18.5 billion), and the company raised full-year operating profit

guidance by ¥15.0 billion to ¥101.0 billion (¥88.0 billion). While performance was

mixed across businesses, cost inflation—particularly in printing—continued to

weigh on profits in 1Q, but profits still increased, supported by higher revenue in

printheads and microdevices and favorable forex. The upward revision to full-year

guidance is primarily driven by expected US tariff refunds. Even with some

businesses performing well, a key focus is whether printing can continue to pass

through higher costs. The share buyback was not a major surprise, but we view it

positively.

Results summary: 1Q business profit rose 12% YoY to ¥22.1 billion (+¥2.3

billion YoY). The YoY bridge was as follows: forex +¥9.3 billion, higher

volume +¥6.9 billion, price +¥5.5 billion, and cost -¥19.3 billion. Segment

business profit was as follows: (1) Precision innovations: ¥15.5 billion (+¥6.0

billion YoY); printheads and microdevices drove strong performance, with

revenue up 14% YoY excluding forex. (2) Industrial & robotics: ¥5.5 billion

(+¥1.7 billion YoY); revenue rose 6% YoY, but profit declined on an

underlying basis excluding forex. (3) Office & home printing: ¥11.4 billion

(-¥3.2 billion YoY); underlying revenue excluding forex rose 2% YoY; inkjet

unit sales were broadly flat YoY, while ink revenue increased. Despite forex

benefits, higher parts/material costs and inventory effects weighed on profit.

(4) Visual & lifestyle: ¥4.2 billion (-¥1.8 billion YoY); underlying revenue was

broadly flat YoY, but higher parts/material and freight costs pressured profit.

Full-year outlook: The company raised full-year business profit guidance by

¥15.0 billion to ¥105.0 billion, incorporating an additional ¥17.0 billion of

expected US tariff refunds from 2Q onward. Offsetting this, the company now

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