CANON ’SHUTTERS’ @ 9% PROFIT DROP
CANON ’SHUTTERS’ @ 9% PROFIT DROP
2005-11-01 at 9:39:00 am #14458
Canon Q3 profits fall
NOV 2005 – Tokyo (JPN): Canon has announced its Q3 figures, revealing a 9.3 per cent drop in operating profit on weak sales of its chip-making equipment, although the company has raised its outlook for the full-year.
Group operating profit was down to ¥143.57 billion ($1.24 billion), from ¥158.3 billion a year earlier. But the company raised its full-year forecast for group operating profit to ¥587 billion, due to a recent weakening of the yen against the dollar and euro.
The loss represented the firms first year-on-year fall in profit in seven quarters
Canon ‘shutters’ at 9% profit drop
Camera manufacturer cites big pension gain in third-quarter last year, raises outlook.
TOKYO – Japan’s Canon Inc. reported a 9.3 percent fall in quarterly operating profit Thursday on weaker sales of chip-making equipment and a delay in the launch of ink jet printers, but it raised its full-year outlook on strong demand for digital cameras and a softer yen.
Canon, the world’s top maker of copiers, cameras and laser printers, said its group operating profit came to Â¥143.6 billion (about $1.2 billion) in the July-September quarter, down from Â¥158.3 billion a year earlier.
Canon raised its group operating profit forecast for 2005 by nearly 2 percent to Â¥587 billion, also reflecting healthy sales of color copiers and laser printer engines supplied to Hewlett-Packard Co (down $0.29 to $26.67, Research).
Ricoh Co., Japan’s second-largest office equipment maker after Canon, recorded a 16 percent rise in operating profit for the first half. Konica Minolta Holdings Inc. is also seen posting higher profits when it reports next month.
Canon’s total sales rose 5 percent to ¥878.50 billion, and the quarterly profit beat a consensus forecast of ¥139.24 billion in a poll of five analysts by Reuters Estimates. Canon’s own forecast was for a profit of ¥136 billion, down 14 percent.
Canon attributed the fall in profit — its first in seven quarters — to the absence of a big pension gain booked in the same period last year.
“If it hadn’t been for this, we would have maintained our profit growth momentum. Our business hasn’t worsened,” Toshizo Tanaka, Canon Senior Managing Director, told a press conference.
Canon reported a fall in sales of steppers, machines that etch circuitry onto chips. Canon’s top competitors in the stepper market are Nikon Corp. and Netherlands-based ASML.
“The silicon cycle has been in a downtrend since late last year,” Tanaka said.
The company also cited a delay in the planned launch of ink jet printers for the quarterly profit decline.
For its full business year to December, Canon said it expected a record net profit of ¥384 billion, above its previous forecast of ¥367 billion, helped by a recent weakening of the yen against the dollar and the euro.
The company raised its 2005 target for shipments of semiconductor steppers to 133 units on Thursday from its previous estimate of 125, while it cut its target for LCD stepper shipments to 110 units from its previous target of 111.
Digital cameras, printers and office copiers, continued to sell well, Canon said.
It raised its 2005 digital camera sales estimate to 16.9 million units from its previous forecast of 16.8 million, mostly due to the popularity of its digital SLRs.
“We have had to lower the price of some of our products, but the downward pressure on prices has weakened a little bit in the third quarter, compared to what we had expected beforehand,” Tanaka said.
He also cited strong sales of its IXY digital cameras, a series of sleek cameras advertised by supermodel-turned-yoga-celebrity Christy Turlington and Japanese football star Hidetoshi Nakata.
“The IXY model sold well without steep discounts,” Tanaka said.
Masaki Iso, chief investment officer at Yasuda Asset Management Co. Ltd., expected investors to buy Canon stocks because of the raised forecast.
“This will be a positive factor for the stock,” he said.
“Shares in companies such as Canon, which have good earnings results but have lagged behind the market, will now have ample opportunity to catch up.”
Prior to the announcement, Canon shares closed down 1.31 percent at ¥6,020. Tokyo’s electrical machinery index IELEC. fell 0.62 percent.