Canon reports 13 percent drop in profit

Tag : equipment bearing

The Japanese camera maker recorded a 107.84 billion yen ($1billion) profit for April-June, down from 123.93 billion yen thesame period the previous year. Quarterly sales totaled 1.106trillion yen ($10.26 billion), down 1.9 percent from 1.127 trillionyen.
The sharp rise of the yen against the dollar was the biggestculprit, Canon said. Calculated in local currencies, sales ofdigital cameras, office equipment for copying and faxing, and otherproducts jumped on year, it said.
The dollar averaged 104.69 against the yen in the first half of theyear, reflecting a 13 percent jump in the value of Japan'scurrency. That eroded the value of overseas earnings of Japaneseexporters such as Canon.
The impact from currency fluctuations erased 118.9 billion yen($1.1 billion) from Canon's first half sales, the company said. Forthe first six months of the year, Canon's net profit dipped 15.9percent to 214.49 billion yen ($2 billion).
Slowdowns and sluggish spending in the U.S., Europe and Japan alsohelped push down sales, although growth was robust in China and therest of Asia, according to Canon.
For the three months ended June 30, sales in Japan fell 3.1 percentfrom the previous year, while sales in the Americas dropped 6.1percent, Canon said. Sales in other areas rose 6.4 percent, itsaid.
Tokyo-based Canon kept its profit forecast unchanged at 500 billionyen ($4.6 billion) for the fiscal year ending Dec. 31, a target ofa 2.4 percent increase from the previous year.
It raised its full-year sales outlook to 4.59 trillion yen ($42.6billion), up from an earlier forecast of 4.57 trillion yen. The newforecast marks a 2.4 percent rise from the year ended Dec. 31,2007.
Canon said its expects demand for digital cameras and color laserbeam printers to keep growing, although price competition willintensify.
Canon acknowledged that worries about the U.S. subprime loan crisisand this year's high oil prices weigh on profit prospects.
But the U.S. economy is likely to recover in coming months, liftedby stimulus measures, and growth can be expected in Russia andother new markets, the company said in its earnings release.