Canon cuts profit forecast on first annual drop in high-end camera sales

24 October 2013 11:15 am - 0 - {{hitsCtrl.values.hits}}

A A A

Japan's Canon Corp cut its operating profit outlook for the second quarter in a row, below analysts' estimates, warning that sales of its signature high-end cameras will fall this year for the first time since their launch in 2003.

The world's largest camera maker said it now sees global economic gloom squeezing sales of its digital interchangeable-lens cameras to 8 million through December from 8.2 million last year. Demand from camera buffs will stay weak in Europe, and fail to recover as quickly in China as Canon had expected.

While the company's point-and-shoot digital camera sales have been hit in recent years as consumers increasingly use smartphones to take casual shots, the high-margin interchangeable-lens format favored by professional photographers and enthusiasts has seen growth every year up to 2012, company officials said.

Despite a rebound in operating profit for July-September from a weak quarter a year earlier, Canon lowered its full-year operating profit forecast to 360 billion yen ($3.70 billion). That compares with an average of 378.5 billion yen based on 23 analysts' estimates according to Thomson Reuters Starmine.

"Until recently, interchangeable-lens sales' growth was close to double figures even when the economy was bad. But now people are postponing consumption of luxury items such as cameras," Chief Financial Officer Toshizo Tanaka said during a briefing in Tokyo, adding that consumers had become more sensitive to price.

In July, predicting a pickup in China in the second half of the year, the company forecast operating profit would be 380 billion yen, compared with 324 billion yen for 2012. Tanaka said protracted gloom in Europe was half of the reason for the downward revision.

Canon said it now sees sales of the digital interchangeable-lens format coming in 11 percent below its previous forecast of 9 million cameras, issued in July.

MACRO FOCUS

Makoto Kikuchi, chief executive of Myojo Asset Management in Tokyo, said, "The slump in interchangeable-lens cameras is not due to a structural problem such as market saturation, but solely because of the worsening of the macroeconomic environment."

"For October-December, emerging economies such as China, India and Brazil may weaken further," Kikuchi said.

One of the first of Japan's technology companies to report results for July-September, Canon made 90.6 billion yen in operating profit in the July-September quarter, up 28 percent from last year, when anti-Japanese sentiment in China stirred by a territorial dispute depressed sales of a range of Japanese goods.

Japanese rival Nikon Corp reports earnings on November 7.

Canon's compact camera sales have long been hit by the boom in demand for smartphones that take photos. But the company left its 2013 sales forecast for compact cameras unchanged at 14 million, against 18.3 million in 2012.

Stock in the company, which also makes products like office printers, chip making equipment and medical devices, has fallen 6.3 percent this year.

That compares with a nearly 40 percent rise in the Nikkei index, driven by growth expectations surrounding Prime Minister Shinzo Abe's policy drive to reinvigorate the Japanese economy.

(Reporting by Sophie Knight; Editing by Kenneth Maxwell)

(Source : Reuters)

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Comments - 0

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Canon cuts profit forecast on first annual drop in high-end camera sales

Comments - 0

Add comment

RECOMMENDED

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Western purple-faced langurs see blue!

Most Viewed in News

Sri Lankan among NASA’s new crew for next simulated Mars journey

Complaint lodged over Piumi Hansamali's possession of Gota’s Range Rover

New Visa procedure implemented

A US “Kaputa”, a Lankan “Nariya” and a Presidential “Feast”

Ranil Wickremesinghe caravan moves on despite barking dogs

SL on alert on possible genocide allegations by Canada

MIRROR CRICKET

TODAY'S HEADLINES