CANON Q3 PROFIT FALL 54 %
CANON Q3 PROFIT FALL 54 %
2009-11-06 at 11:38:34 am #22886
CANON Q3 PROFIT FALL 54 %
Japan’s Canon suffers profit slump, Reports Seventh Quarterly Profit Decline
TOKYO — Japanese high-tech giant Canon Inc. said Tuesday that its profits more than halved in the three months to September from a year earlier because of poor sales of electronics and a strong yen.The camera and office equipment maker logged a net profit of 36.7 billion yen (400 million dollars) for the third quarter of its business year, down 55.8 percent from a year earlier.Operating earnings tumbled 53.6 percent to 60.0 billion yen as revenue slid 21.5 percent year-on-year to 774.3 billion yen, it said.Canon said it was seeing signs that demand was stabilising in key markets, and maintained its forecast for a net profit of 110 billion yen for 2009.The company anticipates an operating profit of 190 billion yen and revenue of 3.20 trillion yen, also unchanged from its earlier projections.It has enjoyed strong sales of high-end digital single-lens reflex (SLR) cameras in recent years, but its sales of photocopiers and precision machinery have been hit hard by the global economic downturn.
Demand for compact digital cameras also remained sluggish in the third quarter and prices continued to decline, pressuring profits, it said.”Demand for compact digital cameras is expected to remain stagnant for the time being … whereas demand for digital SLR cameras is expected to remain strong,” Canon said in a statement.”As for inkjet printers, conditions are expected to gradually improve.”Revenue from office equipment dropped 28.0 percent in the quarter, while sales at the camera business fell 8.3 percent, the company said.For the nine months to September, Canon said its net profit dropped 76.4 percent from a year earlier to 70.1 billion yen, as revenue declined 27.2 percent to 2.26 trillion yen.
Canon Q3 Profit Plunges
Japanese camera and office equipment maker Canon Inc. reported Tuesday a sharp decline in profit for the third quarter, impacted negatively by lower sales volumes of office equipment and other products as well as stronger yen. Looking ahead, Canon backed its fiscal 2009 earnings and sales forecast, but said it sees weak demand for most of its key products.Net income for the quarter attributable to the company plunged 55.8% to 36.73 billion yen or 29.76 yen per share form 83.04 billion yen or 65.91 yen per share in the previous year.Net sales were 774.32 billion yen, down 21.5% from 985.99 billion yen in the prior year, largely due to the effects of reduced sales volumes of office equipment and other products along with the substantial rise in the value of the yen.Product segment-wise, sales from business machines declined to 488.76 billion yen from 651.00 billion yen in the comparable period. Sales from cameras were 229.03 billion yen, down 8.3% from 249.77 billion yen in the prior year. Optical and other products sales plunged to 56.53 billion yen from 85.21 billion yen in the year-ago quarter.
Region-wise, sales from Japan decreased 17.8% to 161.86 billion yen from 196.97 billion yen in the year-earlier quarter. Americas sales were 217.51 billion yen, lower than 286.12 billion yen, and sales from Europe were 237.45 billion yen, much lower than 316.66 billion yen in the previous year. Sales from other areas dropped to 157.50 billion yen from 186.24 billion yen in the comparable period.The average value of the yen during the quarter was 93.46 yen to the U.S. dollar, a year-on-year appreciation of about 14 yen, and 133.60 yen to the euro, a year-on-year appreciation of nearly 28 yen.Canon noted that despite the launch of new products and ongoing cost-cutting efforts aimed at an improved gross profit ratio, the impact of the appreciation of yen and reductions in sales volumes led to a 3.1 point decline in the ratio to 45.1% for the quarter. Consequently, gross profit decreased by 26.5% to 349.3 billion yen.For the nine-month period, net income attributable to Canon was 70.08 billion yen or 56.77 yen per share, much lower than 297.53 billion yen or 236.00 yen per share in the comparable period. Year-to-date, net sales declined 27.2% to 2.26 trillion yen from 3.10 trillion yen in the year-ago period.Looking ahead, Canon said it anticipates demand for network digital digital multifunction devices, or MFDs, and laser beam printers will likely remain challenging. Demand for compact digital cameras is expected to remain stagnant for the time being due to the drop in consumer sentiment resulting from the weak economy, but sees strong demand for digital SLR cameras. The company also anticipates demand for inkjet printers will gradually improve.
s) - Canon expects exchange rates for the fourth quarter of 90 yen to the U.S. dollar and 130 yen to the euro, representing an appreciation of about 6 yen versus the U.S. dollar and a depreciation of about 4 yen against the euro compared with the previous year.Looking ahead to the full year 2009, the company said it continues to expect net income attributable toCanon of 110.00 billion yen, down 64.4% from 309.15 billion yen reported last year. Net sales are expected to decline 21.8% to 3.20 trillion yen last year. Canon continues to expect operating profit of 190 billion yen, lower 61.7% than the previous year.