Olympus Financials (Recent)
Olympus recently reported (presentation materials) "lower-than-expected sales of digital SLR (mirrorless) cameras" and forecast that their Imaging Business will still have an operating loss in fiscal year 2015.
Here is Thom Hogan's analysis:
It's a good thing that Olympus has patient shareholders.
Olympus' decisions are beholden as much to the will of its creditors (large Japanese banks dominating) as to the shareholders. It is a leveraged firm and does not have a thick equity cushion. It cannot use earnings from medical devices to cover losses from cameras indefinitely
I haven't read of anyone demanding that they dump their imaging division.
It sure isn't because they give a hoot about cameras. The claim of "synergies" is also lame.
- Some were willing to give management two years to cut P&S operations and see whether the surviving PEN, OMD, and Tough products might be profitable on their own.
- Easier to sell an operation that has turned the corner, rather than one that is bleeding badly.
- No buyers. Who wants to buy a company that makes something that has gone out of fashion? Established camera companies have trouble enough selling their own wares. Vulture capitalists, on the other hand, would have a hard time coming up with turning a profit on something that, even if offered for free, would still cost a fortune to keep in operation.
- Labor costs. Redundancy payments due severed workers would make an outright shutdown prohibitively expensive. Better to encourage employees to leave by cheaper means: zero raises, impossible performance quotas, or make everyone report to exceptionally difficult individuals.
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