Canon’s Quarterly Profit Falls by 81%
Wow! You know things are tough all over when a heavyweight like Canon reports a number like this one. Canon’s profitability has been hit by sliding consumer demand as well as the strength of the yen, which makes Japanese products less price-competitive overseas and eats into revenues when they are converted into the Japanese currency. “A sudden cooling in demand since the autumn had a far bigger impact on our business than we anticipated,” Canon’s Managing Director Masahiro Osawa said. Canon predicted a further slide in annual profit to a 14-year low this year.
The stronger yen made a huge difference because 80% of Canon’s business is overseas. Without the negative effect of a firmer yen, its operating profit would have been 677.1 billion yen in 2008, instead of an actual 496.1 billion yen. Canon expects its digital camera sales to fall 7 percent from a year earlier to 23.9 million units in 2009, the first ever unit sales decline for the industry leader.
Canon said it would aim to cut about 70 billion yen in costs in 2009 as it copes with a crisis that has pushed many rival electronics makers including Sony into the red, forcing them to scale back production and slash jobs. A number of analysts have downgraded the stock.
See Bloomberg Report: Canon Sees Profit at Decade Low on Yen, Camera Prices
Leave a Reply