Sales Up for Canon’s Quarter, but Income Slips; Lowers Outlook for Full Year
Sales were up for Canon Inc. of Japan’s third-quarter, totaling ¥925.8 billion (approximately $7.7 million U.S.), while third-quarter operating profit increased by 7.6 percent to ¥77.3 billion (approximately $643 million U.S.). However, net income for the quarter declined by 15.6 percent to ¥49.2 billion (approximately $409 million U.S.).
For the Canon’s three quarters ending September 30, 2015 (first nine months of 2015), net sales were up 3.4 percent to ¥2,757.6 billion, while net income was down -19.0 percent.
During the third quarter, Canon says that despite a gradual recovery of its sales of interchangeable-lens digital cameras in Japan and Europe, “severe conditions” continued in other regions while sales volume for digital compact cameras decreased compared with the same period of the previous year.
As for office copier/MFPs and laser printers, although sales of color machines were strong, sales of monochrome models were sluggish. For semiconductor lithography equipment and flat-panel display (FPD) lithography equipment, unit sales for the quarter exceeded those for the same period of the previous year, supported by favorable market conditions.
Consequently, benefitting from the boost provided by the acquisition of Axis (maker of network cameras) and the positive effect of favorable currency exchange rates, third-quarter net sales increased 6.1 percent year-over-year to ¥925.8 billion.
The gross profit ratio for the third quarter rose 1.2 points year on year to 50.7 percent, due, Canon says, to its ongoing cost-cutting activities and “highly profitable new products,” and the gross profit ratio for the first nine months also increased by 0.7 points to 51.2 percent, remaining at a high level.
As a result, third-quarter operating profit increased by 7.6 percent to ¥77.3 billion.
However, other income (deductions) decreased by ¥11.6 billion due to foreign-currency exchange losses, leading to a year-on-year decline in income before income taxes of 7.7 percent to ¥74.0 billion, and a decrease in net income attributable to Canon Inc. of 15.6 percent to ¥49.2 billion.
Operating profit for the first nine months of the year decreased by 6.4 percent to ¥248.2 billion, while income before income tax decreased by 13.7 percent to ¥238.5 billion, and net income attributable to Canon Inc. for the first nine months decreased by 19.0% to ¥151.3 billion.
Basic net income attributable to Canon Inc. shareholders per share for the third quarter was ¥45.03, a decrease of ¥7.64 compared with the corresponding quarter a year ago, and ¥138.56 for the first nine months of 2015, a year-over-year decrease of ¥28.54.
Upon taking into consideration the sudden economic slowdown in China and elsewhere across Asia, as well as other developing countries, along with the negative impact on sales and gross profit due to a revised foreign-exchange rate assumption, Canon projects full-year consolidated net sales in 2015 of ¥3,820.0 billion, a year-over-year increase of 2.5 percent; operating profit of ¥365.0 billion, a year-over-year increase of 0.4 percent; income before income taxes of ¥355.0 billion, a year-on-year decrease of 7.4 percent; and net income attributable to Canon Inc. of ¥225.0 billion, a year-on-year decrease of 11.7 percent.