Canon Inc. raised its profit projection for the year, regardless of falling sales, as a weaker yen and cost cuts made up for falling camera demand.
The company reported a 4.5% decrease in sales to ¥872 208 million, down from ¥913 149 million last year, including a 9.4% fall in imaging system sales which include digital cameras as consumers continued to prefer taking pictures with their smartphones.
“We arent planning to compete face-to-face with smartphones,” said CFO Toshizo Tanaka at a news conference. “Instead, we will sell cameras that can provide quality that smartphones cannot give.”
Mr. Tanaka said the digital camera market is expected to stop shrinking this year or the next, and start a “healthy growth of around 5%”.
World-wide camera sales dropped 32% during the January-August period, same as a year ago, according to the Camera & Imaging Products Association in Tokyo.
Canon lowered its sales projection for interchangeable-lens digital cameras to 6.5 million units from the previous forecast of 7 million.
The company reported revenue decreased across all regions, in Asia and Oceania sales were down 7%, the Americas fell 4.8% and Europe dropped 6.4%, leading to an operating loss of ¥2 219 million in the region. In Japan revenue shrunk 9.5%, while operating profit dropped 16.1%.
Overall operating profit hit a 20.7% decrease to ¥71 832 million in the quarter ended September 30, compared to ¥90 610 last year.
Net income fell 1% in Q3 to ¥58 249 year-to-year, meanwhile earnings per share were ¥52.67, a 2.9% increase.
However, a weaker yen adds to Japanese products competitiveness overseas and increases the value of profits when converted back to yen. Mr. Tanaka said the decrease in the yens value alone boosted revenue by ¥43 billion and operating profit by ¥15.8 billion.
The price shifts in the yen caused some people to state that it could hurt the domestic economy. Mr. Tanaka said the current state of the currency “isnt uncomfortable for us.”
Canon estimates exchange rates of ¥108 to the U.S. dollar and ¥137 to the euro during the fourth quarter. Based on that the company raised its full-year forecast and now expects net profit to grow 8.5% to ¥250 billion compared to an earlier projection of ¥240 billion.
Canon Inc. gained 0.77% on Monday and closed at ¥3 275.5 in Tokyo, marking a one-year increase of 6.35%. The company is valued at ¥4.34 trillion. According to the Financial Times, the 15 analysts offering 12-month price targets for Canon Inc. have a median target of ¥3 600, with a high estimate of ¥4 200 and a low estimate of ¥3 000. The median estimate represents a 9.91% increase from the last price of ¥3 275.5
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