Canon fails to click in 2013 as camera sales disappoint
TOKYO -- Canon's group operating profit for 2013 likely fell short of its forecast, coming in flat at around 320 billion yen ($3.02 billion), as weaker-than-expected camera sales undermined the benefits of a weaker yen and robust office equipment sales.
The company had projected 360 billion yen in operating profit. Compact camera sales decreased more than 20% in volume amid competition from smartphones. Even sales of higher-end, single-lens reflex cameras edged down as demand ebbed in Europe and China, among other markets.
Canon had already downgraded its outlooks twice in 2013. Group sales are now estimated at just over 3.7 trillion yen, up 7% but below the 3.75 trillion yen projected. Though figures in local currencies likely dropped, the softer yen boosted sales in yen terms.
Canon generates roughly 80% of its sales outside Japan, so a weaker yen was a major boon. Last year, the yen hovered around 98 to the dollar, compared with 80 in 2012. The euro was traded at around 130 yen, compared with 103 or so the previous year. The weaker home currency likely pushed up Canon's operating profit by some 200 billion yen last year.
Office equipment continued to perform strongly. Brisk sales of commercial printers at Dutch subsidiary Oce, which Canon turned into a wholly owned unit last March, also contributed to revenue.
Net profit was likely flat at around 224.5 billion yen. The company says it has not determined the annual dividend, but it is likely to leave the amount unchanged from the previous year, or 130 yen a share.
This year, as U.S. and European economies pick up, demand for high-margin SLR cameras is expected to recover. Canon is likely to earn about 340 billion yen in operating profit on sales of 3.9 trillion yen, both up around 5%.