Canon, Inc. the world’s largest camera maker, raised its profit forecast on higher sales and a lower-than-expected impact from Japan’s strongest earthquake.
Full year net income may total 260 billion yen ($3.3 billion), 18 percent higher than the company’s April prediction, it said in a statement today. Canon also increased its forecasts for revenue, operating profit and sales of single-lens reflex cameras used by professionals.
Canon lowered the estimated impact from the March 11 earthquake and tsunami on sales by 37 percent to 197.4 billion yen this year after the maker of EOS digital cameras resumed work at all its factories in June and suppliers try to speed up recovery. Japan’s exports last month fell less than economists expected as a decline in auto shipments slowed, underscoring the recovery of the world’s third-largest economy.
“Canon is among Japanese manufacturers that are recovering production faster than expected,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo. “The company probably put in a lot of effort to bring all its factories back into operation.”
Full-year sales may be 3.78 trillion yen, compared with an earlier forecast for 3.73 trillion yen, according to the statement. Operating profit may be 380 billion yen, compared with 335 billion yen forecast earlier.
Professional Cameras
The company’s shares were unchanged at 3,785 yen at the 3 p.m. close in Tokyo trading. They have fallen 10 percent this year. Fourteen of the 23 analysts tracking the company in the past year recommend investors “buy” the stock while nine have “hold” ratings, according to data compiled by Bloomberg.
Net income in the three months ended in June declined 20 percent to 53.9 billion yen. That beat the 15.6 billion yen average of three analysts’ estimates compiled by Bloomberg. Operating profit tumbled 31 percent to 78.4 billion yen, also beating estimates.
Canon raised the forecast for sales of cameras with interchangeable lenses, typically used by professionals, to 7.3 million units from 7 million predicted earlier. The forecast for sales of compact cameras was kept unchanged at 20 million units.
Interchangeable Lenses
Demand for high-end cameras including models with interchangeable lenses is robust in China, Toshizo Tanaka, Canon executive vice president, told reporters in Tokyo. India is another region that may drive camera sales this year, he said.
Global shipments of digital-cameras tumbled 7 percent in units and 17 percent in value during the first five months from a year earlier, according to the Camera & Imaging Products Association.
Profit at Canon’s consumer products operations, which makes cameras and inkjet printers, decreased 32 percent to 45.3 billion yen in the quarter to June 30.
Income at the office-equipment division, Canon’s biggest, dropped 29 percent to 59.8 billion yen in the quarter as revenue fell 11 percent. This division makes copiers and multifunction printers.
“Production at most of our factories returned to pre- earthquake level at the end of June,” said Tanaka. The company foresees little impact from power-supply shortages this fiscal year as Canon has taken measures at its plants and offices such as adding generators, he said.
Stronger Yen
Canon, which generated 81 percent of sales outside Japan last year, revised its assumptions for the yen exchange rate to the euro to 115 yen for the six months from July 1, compared with 120 yen projected three months ago. The company also revised its assumption for the dollar at 80 yen from 85 yen estimated in April.
The world’s second-largest printer maker may lose about 10.2 billion yen of operating profit in the fiscal second-half for every 1 yen decline in the value of the dollar and 5.3 billion yen of income for each 1 yen decline by the euro, the company said today.
To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net
