Canon Delivers Second Consecutive Quarter of Upbeat Financial Results

Canon Inc. headquarters in Japan.

Bolstered by higher sales of office copier/MFPs and laser printer, as well as by its acquisition of Toshiba Medical Systems, Canon Inc. of Tokyo, Japan, today released upbeat results for its second quarter, with sales up 15.4 percent and net income up 29.4 percent, both versus the same quarter a year ago.

During the second quarter, Canon says its office copier/MFFs “enjoyed solid demand,” mainly for color models. The total sales volume of laser printers increased compared with the same period of the previous year “amid recovering demand in emerging countries, supported by the increased sales of new models.” Although total unit sales of interchangeable-lens digital cameras and compact cameras declined, compared with the same period of the previous year amid the shrinking market, sales of compact-system cameras increased.

Looking at inkjet printers, sales volume remained at approximately the same level as the previous year, due to such factors as increased sales of refillable ink-tank models for emerging countries, and new models launched in the previous year. Sales of semiconductor lithography equipment and manufacturing equipment for OLED displays exceeded those of the previous year, “thanks to favorable market conditions.”

Under these conditions, along with the impact of acquiring Toshiba Medical Systems Corporation (TMSC), second-quarter net sales increased by 15.4 percent year-over-year to ¥992.5 billion. Net sales for the first half of the year increased by 18.6 percent year-over-year to ¥1,965.2 billion.

Although Canon’s gross profit ratio dropped by 0.4 points to 49.9 percent due to the effect of the product mix, gross profit increased by 14.6 percent year-over-year to ¥495.6 billion, “thanks to such factors as the increase in sales and continuous cost-down efforts.” Operating expenses increased by 9.7 percent year-over-year to ¥399.2 billion, “mainly due to the impact of acquiring TMSC.”

As a result, second-quarter operating profit increased by 40.4 percent to ¥96.3 billion and other income (deductions) decreased by ¥9.2 billion, due to foreign currency-exchange losses, while income before income taxes increased by 22.9 percent year on year to ¥99.6 billion, and net income attributable to Canon Inc. increased by 29.4 percent to ¥69.2 billion.

First Half of Canon’s Fiscal Year

Operating profit for the first half of Canon’s fiscal year increased by 58.2 percent to ¥172.0 billion, while income before income taxes increased by 40.1 percent to ¥177.6 billion, and first-half net income attributable to Canon Inc. increased by 52.6 percent to ¥124.3 billion. Basic net income attributable to Canon Inc. shareholders per share was ¥63.53 for the second quarter, a year-over-year increase of ¥14.59, and ¥113.98 for the first half, a year-over-year increase of ¥39.41.

Office Business Unit Second-Quarter Results

Looking at Canon’s second-quarter performance of its Office Business Unit, sales of office MFPs increased versus the same period in the previous year, “supported by steady sales of newly launched small-office/home-office color A3 (12”x18”) imageRUNNER ADVANCE C3500-series models and A3 (12”x18”) imageRUNNER ADVANCE C5500-series models, launched in the previous year.

Among high-speed continuous-feed printers, sales of the Océ-produced VarioPrint i300, a high-speed sheet-fed color inkjet press, increased year-over-year. As for laser printers, sales of both hardware and
consumables increased from the same period of the previous year, supported by steady sales of new models that expanded Canon’s product lineup.

These factors resulted in total sales for the Office Business Unit of ¥470.7 billion, a year-over-year increase of 3.1 percent, while operating profit totaled ¥55.9 billion, a year-over-year increase of 17.4 percent.

Sales for the combined first six months of the year totaled ¥928.4 billion, a year-over-year increase of 1.9 percent, while operating profit totaled ¥111.3 billion, a year-over-year increase of 20.6 percent.

Within Canon’s Imaging System Business Unit, although sales volume of interchangeable-lens digital cameras declined compared with the previous year, owing to the shrinking market, unit sales of compact-system cameras, including the newly launched EOS M6, increased from the same period of previous year, allowing Canon to maintain the top share in major countries in Europe, United States, and Japan. As for digital compact cameras, while sales volume declined amid a shrinking market, sales of high-value-added models “enjoyed solid demand, supported by healthy demand for the newly launched G9 X Mark II, part of the high-image-quality PowerShot G-series lineup.”

As for inkjet printers, newly designed Canon home-use models launched in the previous year and refillable ink-tank inkjet models that target emerging countries enjoyed strong demand, resulting in unit sales remaining at approximately the same level as the corresponding period of the previous year. As a result, sales for the business unit declined by 1.7% to ¥282.7 billion year-over-year, while operating profit totaled ¥48.5 billion, a year-over-year increase of 12.2 percent. Sales for the combined first six months of the year totaled ¥524.7 billion, a year-over-year increase of 0.5 percent, while operating profit totaled ¥77.7 billion, a year-over-year increase of 23.7 percent.

Forecast

Upon taking into consideration the impact of acquiring TMSC and its current economic forecast, Canon projects full-year consolidated net sales for 2017 of ¥4,050.0 billion, a year-over-year increase of 19.1 percent; operating profit of ¥330.0 billion, a year-over-year increase of 44.2 percent; income before income taxes of ¥340.0 billion, a year-on-year increase of 39.0 percent; and net income attributable to Canon Inc. of ¥220.0 billion, a year-on-year increase of 46.0 percent.

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