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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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