Canon Reports Third-Quarter Results, Lowers Forecast

On October 25th, Canon Inc. of Tokyo, Japan, reported financial results for its third quarter. Citing a lagging camera market, Canon reported that third-quarter operating profit decreased by 12.4 percent to ¥68.3 billion, while net income decreased by 26.6 percent to ¥46.3 billion.

Operating profit for the first nine months of Canon’s fiscal  year decreased by 0.7 percent to ¥243.4 billion, while net income for the first nine months decreased by 3.4 percent to ¥181.0 billion.

Basic net income attributable to Canon Inc. shareholders per share was ¥42.84 for the third quarter, a year-on-year decrease of ¥15.55, and ¥167.67 for the first nine months, a year-on-year decrease of ¥4.63.

Results by Segment

Office Business Unit

Sales of office MFPs increased from the same period a year ago, supported by such color models as the next-generation A3 (12” x 18”) color imageRUNNER ADVANCE series, which are compatible with external cloud services, and the imageRUNNER C3020 series, which Canon says consist of strategic models for emerging countries.

As for laser printers, sales of both hardware and consumables increased from the previous year, supported by steady sales of new models that achieved low power consumption, compact body designs, and high productivity.

These factors resulted in total sales for the Office Business unit of ¥430.4 billion, a year-on-year increase of 0.2 percent, while operating profit totaled ¥49.9 billion, a year-on-year increase of 15.2 percent.

Sales for the combined first nine months of the year for the Office Business Unit totaled ¥1,335.7 billion, a year-on-year increase of 0.6 percent, while operating profit totaled ¥166.5 billion, a year-on-year increase of 6.9 percent.

Imaging System Business Unit

Within the Imaging System Business Unit, Canon maintained the top share of the overall interchangeable-lens digital camera market, mainly in major countries in Europe and the Americas and in Japan. Within this, sales of mirrorless cameras increased mainly supported by sales of such new products as the EOS Kiss M.

Inkjet printers sales increased  compared with the same period a year ago, supported by steady sales of home-use models and  refillable ink tank models, “due to the implementation of revised sales strategies tailored to each region.:

However, sales decreased overall for this business unit compared with the same period a year ago due to a temporary slowdown in demand, mainly for entry-level models. As for digital compact cameras, although sales decreased compared with the same period a year ago “amid the shrinking market, sales of high-value-added  models such as the PowerShot G-series enjoyed solid demand.”

As a result, sales for this business unit decreased by 15.6 percent to ¥228.3 billion year on year, while operating profit
totaled ¥21.4 billion, a year-on-year decrease of 45.3 percent.

Sales for the combined first nine months of the year for this business unit totaled ¥710.6 billion, a year-on-year decrease of 10.6 percent, while operating profit totaled ¥80.9 billion, a year-on-year decrease of 30.8 percent.

Medical System Business Unit

According to Canon, its Medical Systems Corporation’s computed tomography (“CT”) systems maintained the top share of the Japanese market, and sales grew steadily for such newly launched products as the Vantage Orian, magnetic resonance imaging (“MRI”) systems. However, overall sales decreased compared with the same period a year ago, “due to restrained purchasing of diagnostic imaging systems in Japan.”

As a result, sales for the business unit decreased by 4.0 percent to ¥107.6 billion year on year, while operating profit totaled ¥8.1 billion, a year-on-year increase of 7.6 percent, mainly thanks to a shift in sales strategy away from selling models with a low profit margin in an effort to improve profitability.

Sales for this business unit for the combined first nine months of the year totaled ¥319.4 billion, a year-on-year decrease of 3.9 percent, while operating profit totaled ¥20.5 billion, a year-on-year increase of 16.8 percent.

Industry and Others Business Unit

In Canon’s Industry and Others Business Unit, sales of semiconductor lithography equipment increased from the same period of the previous year due to increasing demand for memory devices. However, for FPD lithography equipment and OLED panel manufacturing equipment, sales decreased compared with the same period a year ago, mainly due to a temporary slowdown in capital investment in panel manufacturing equipment, which has been particularly high until recently.

As for network cameras, Canon’s Axis subsidiary enjoyed solid sales amid increasing market demand.

Overall, though, sales for this business unit decreased by 8.8 percent year on year to ¥188.3 billion, while operating profit totaled ¥14.3 billion, a year-on-year decrease of 18.8 percent.

Sales for the combined first nine months of the year for this business unit totaled ¥607.1 billion, a year-on-year increase of 6.2 percent, while operating profit totaled ¥55.5 billion, a year-on-year increase of 45.0 percent.

Forecast

Canon projects full-year net sales of ¥4,000.0 billion, a year-on-year decrease of 2.0 percent; operating profit of ¥335.5 billion, a year-on-year increase of 4.3 percent; income before income taxes of ¥365.0 billion, a year-on-year increase of 3.1 percent; and net income attributable to Canon Inc. of ¥251.0 billion, a year-on-year increase of 3.8 percent.

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