CANON CORP NET PROFIT DOWN 8.9%

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Canon Warns Stronger Yen to Cut Sales
October  2007; TOKYO — Canon Inc.’s net profit fell 8.9% in the third quarter, hit by foreign-exchange losses because of a stronger-than-expected yen. The Tokyo-based precision-electronics maker maintained its full-year profit outlook, though it trimmed its sales expectations.Canon posted a group net profit of 105.3 billion yen ($921.9 million) for the July-September quarter, compared with 115.59 billion yen a year earlier. Group sales rose 6.4% to 1.051 trillion yen from 987.97 billion yen, helped by solid sales of copiers and digital cameras, while group operating profit edged up 0.9% to 174.22 trillion yen.Because of the stronger yen, Canon booked a loss of 18 billion yen related to foreign-currency-denominated accounts receivable. A change to its valuation methods for machinery and equipment also pulled down profit.But strength in its digital-camera business pushed up sales, thanks to rising demand in emerging markets. “We expect demand from emerging markets to keep rising for a while,” said Masahiro Osawa, managing director of finance and accounting at Canon.For the year ending Dec. 31, Canon continues to predict group net profit of 500 billion yen, though it trimmed its group-sales outlook to 4.56 trillion yen from 4.58 trillion yen, as the Japanese currency has been stronger than anticipated. Canon reports its earnings based on U.S. accounting standards.

Separately, Canon rival Ricoh Co. reported a 16% drop in net profit for its fiscal second quarter because of higher costs related to the integration of its U.S. businesses.Ricoh posted group net profit of 19.31 billion yen for the quarter ended Sept. 30, down from 22.92 billion yen a year earlier. Group sales rose 11% to 558.26 billion yen from 502.35 billion yen, backed by strong sales of office equipment. Ricoh left its outlook unchanged for the year ending in March. It expects group net profit of 117 billion yen and group sales of 2.250 trillion yen.Ricoh reports its earnings based on U.S. accounting standards.

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October 29, 2007 at 12:22 PM