Canon’s Second Quarter Profit Crushed by Economic Downturn
Canon Inc. said second quarter profit plunged 86 per cent as the global economic downturn weighed on sales of its copy machines, printers and digital cameras while a stronger yen reduced overseas earnings.
Canon’s net profit was 15.6 billion yen (US$164 million) for the April-June quarter, down from 107.8 billion yen a year earlier. Revenues declined 28 per cent to 793.8 billion yen, from 1.11 trillion yen last year.
For the current fiscal year through December, the company cut its revenue target to 3.20 trillion yen from 3.33 trillion yen. It held its profit target steady at 110 billion yen, which would mark a 64 per cent yearly decline.
With three-quarters of revenues from overseas, Canon was hurt by the stronger yen compared to a year earlier. The company said the rise in the Japanese currency has taken about 151 billion yen from its revenue over the first six months of the year, compared to last year.
One bright spot was SLR, or single-lens reflex, cameras, where demand was steady. But its overall camera business suffered as prices of cheaper digital models continued to fall rapidly.
Unlike many Japanese companies, Canon’s fiscal year matches the calendar year. The company reports earnings under U.S. accounting rules.
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