Canon Reports Second-Quarter Results; Lowers Outlook

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Canon Inc. of Tokyo, Japan, reported results for its second quarter that ended on June 30, 2018. Net income per share was ¥71.93 for the second quarter, a year-over-year increase of ¥8.40 compared to second-quarter 2017, and ¥124.83 for the first half of the year (January 1 to June 30, 2018), a year-over-year increase of ¥10.85 compared to the first half of 2017. Net income for the second quarter increased by 12.3 percent compared to second-quarter 2017 to ¥77.7 billion.

Second-quarter net sales increased by 1.4 percent year-over-year to ¥1,006.4 billion. Net sales for the first half of the year increased by 0.1 percent year-over-year to ¥1,967.1 billion. Operating expenses decreased by 6.1 percent year-over-year to ¥376.6 billion, due to company-wide cost-reduction efforts.

As a result, Canon says its second-quarter operating profit increased by 4.4 percent to ¥98.0 billion. Operating profit for the first half of the year increased by 4.8 percent to ¥175.0 billion, while income before income taxes increased by 10.3 percent to ¥195.9 billion, and first-half net income increased by 8.5 percent to ¥134.8 billion.

During the second quarter, sales of office copier/MFPs were up compared with second-quarter 2017, due to expanded sales of color models. Sales of laser printers increased compared to second-quarter 2017, supported by “steady sales of newly launched models, as demand recovered in emerging countries.”

Sales of inkjet printers declined compared to second-quarter 2017,  mainly due to a “review” of Canon’s distribution channels.

Total sales volume of interchangeable-lens digital cameras decreased compared to second-quarter 2017, due to a shrinking market; however sales of mirror-less cameras increased.

For medical equipment, diagnostic ultrasound systems experienced “solid demand, mainly outside of Japan,” achieving increased sales compared to second-quarter 2017.

For industrial equipment, sales of semiconductor lithography equipment “increased significantly” compared to second-quarter 2017, due to favorable market conditions, while sales of network cameras “increased steadily.”

Office Business Unit

Sales of office MFPs were up compared to second-quarter 2017, supported by such models as the newly launched next-generation A3 (12”x18”) color Canon imageRUNNER ADVANCE C3500 series and imageRUNNER C3020 series, said to be strategic models for emerging economies.

In commercial printing, sales of the newly launched Océ-produced Colorado 1640 wide-format roll-to-roll printer were “solid.”

As for laser printers, sales increased compared with second-quarter 2017, supported by steady sales of new models that provide lower power consumption and compact body designs. Laser-printer consumables’ sales were “steady.”

This resulted in total sales for the Office Business Unit in the second quarter of ¥477.7 billion, a year-over-year increase of 1.5 percent, while operating profit for the unit totaled ¥61.9 billion, a year-over-year increase of 10.7 percent.

Sales for the Office Business Unit for the first six months of the year totaled ¥935.4 billion, a year-over-year increase of 0.8 percent, while operating profit totaled ¥114.9 billion, a year-over-year increase of 3.2 percent.

Outlook

While Canon anticipates continued demand for virtually all of its products, it expects that with flat-panel display (“FPD”) lithography equipment and OLED panel manufacturing equipment, the market is expected to shift from an active phase to a short-term adjustment phase, as panel manufacturers are expected to postpone some capital investment.

Taking this into consideration, as well as sales of office MFFs and interchangeable-lens digital cameras shifting to a slightly lower price range, Canon projects full-year consolidated net sales of ¥4,120.0 billion, a year-over-year increase of 1.0 percent; operating profit of ¥378.5 billion, a year-over-year increase of 17.7 percent; income before income taxes of ¥410.0 billion, a year-over-year increase of 15.9 percent; and net income attributable to Canon Inc. of ¥280.0 billion, a year-on-year increase of 15.7 percent.

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