Canon, Sharp, Lexmark, Océ Report Mixed Financial Results

Canon Reports Income Down –2.4 Percent for 1st Quarter, Sales Up 11.1 Percent; Expects Lower Sales for Fiscal 2011 Due to Japan Earthquake

For first-quarter 2011, Canon Inc. of Japan reported net income of 55.5 billion, down –2.4 percent versus first-quarter 2010, while sales were up 11.1 percent to 839.2 billion yen. However, the company states that sales would have been 21.4 percent higher if they had not been affected by the March 11th Japan earthquake.

For the entire fiscal 2011 year, Canon is projecting sales of 3,730.0 billion yen, an increase of 0.6 percent; it had previously forecast 4,100.0 billion yen in sales. It’s also projecting net income of 220.0 billion yen, a decrease of –10.8 percent versus fiscal year 2010. It expects that for fiscal 2011, problems resulting from the earthquake will result in a loss of 314.4 billion yen in sales.

Within its digital-imaging business for fiscal year 2011, Canon projects a loss of some 146.5 billion yen in sales, with  profits down down –62.7 percent.

Also within the digital-imaging market (printers, MFPs, digital copier/printers), sales were up 104.6 percent for first-quarter 2011 versus first-quarter 2010. Sales of office printers/MFPs were up 37 percent, while sales of consumers printers/All-in-Ones were up 51.6 percent.

Within its laser-printer division, first-quarter 2011 sales growth was up 44 percent versus first-quarter 2010. Canon’s forecasting 17 percent sales growth for this segment for the entire fiscal year 2011, and it appears that laser-printer and toner production facilities were not as heavily affected by the Japan earthquake as digital copier/printer and MFP production facilities.

Overall, Canon says it will continue re-building its supply-chain structure, and seek to accelerate recovery as quickly as possible.

Sharp Net Income Up 341.2 Percent in Fiscal 2010

Sharp Corporation of Japan reported upbeat results for fiscal year 2010, with net income up 341.2 percent to 19.4 billion yen, an increase of 341.2 percent versus fiscal 2009. This is a great improvement over fiscal year 2009’s income of 4.3 billion yen, and fiscal year 2008’s loss of –125.8  billion yen, but not near fiscal year 2007’s pre-recession income of 101.9 billion yen. Sales however were up 9.7 percent to 3,021.9 billion yen, close to the 3,417.7 billion yen the company reported for fiscal year 2007.

Sales of information equipment was up 2.6 percent to 273.9 billion yen. Information equipment includes digital copier/printers, data projectors, fax MFPs, calculators, mobile phones, and wireless PDAs.

Although Sharp did not previously report that production had been affected by the March 2010 Japan earthquake and tsunami, it warns that it expects the “business environment to become more severe than ever due to the impact of the earthquake on supply-chain manufacturers,” further decline in consumer confidence, and rising prices for natural resources. Because the company says it’s very difficult to assess the impact of the earthquake on business, it’s not publishing a forecast for fiscal 2011.

Océ Reports Small Net Loss for 1st Quarter

Océ N.V. of the Netherlands, which last year was acquired by Canon Inc. of Japan, reported a net loss of  € -6 million for 2011’s first quarter, which, however was considerably smaller than its net loss of € -87 million for the first quarter of 2010. Total revenue was  € 638 million, a 9-percent decrease versus first-quarter 2010. Earnings per share were $1.04.

Two segments that were strong for Océ in the first quarter were continuous-feed printing systems, JetStream series, and Arizona series. Océ also noted that the share of color imaging systems continued to grow as a revenue generator: color revenue grew to 38 percent of revenues, versus 30 percent for first-quarter 2010.

Rokus van Iperen, Océ Chairman of the Executive Board, cited two declining revenue sources in first-quarter 2011: “Océ had a challenging first quarter as revenues decreased due to a decline in two market segments. Cut-sheet revenues were impacted by weaker print-room sales and portfolio changes. Technical documentation revenues were affected by the ongoing crisis in construction markets. We have addressed these revenue developments by strengthening our support for sales companies and by stringent cost control.”

Lexmark Reports Small Decline in Revenue and Earnings

Lexmark reported $1.034 billion in revenues for first-quarter 2011, which was slightly lower compared to the $1.043 billion it reported for first-quarter 2010. Earnings for first-quarter 2011 were also lower at $83 million compared to first-quarter 2010 earnings of $95 million.

Lexmark President and CEO Paul Rooke noted that the company will continue to focus on workgroup color laser printers and enterprise-management content software, with for instance its new X548de/dte introduced last week. “Despite the near-term marketplace and transitional challenges we faced this quarter, Lexmark’s strategic focus areas grew as we continue to execute our long-term strategy of targeting higher usage, higher growth areas of the business market.”

For second-quarter 2011, Lexmark forecasts a “low single-digit”percentage decline in revenue versus second-quarter 2010, and earnings per share in the $0.89 to $0.99, or $1.00 to $1.10 range, excluding $0.11 per share for restructuring-related and acquisition-related adjustments.

Earlier in February 2010, Lexmark had reported earnings of $340 million for fiscal 2010, an increase of 133 percent compared to fiscal 2009 earnings of $146 million, and revenue growth of 8 percent versus fiscal year 2009, driven by record laser revenue of $3.006 billion, up 15 percent year-to-year.

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