ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Companies

Canon expects net profit to fall 5% on sliding camera sales

Outlook for 2019 dims despite $9bn in growth investments over past decade

Canon's digital camera operations have fallen victim to a shrinking market as smartphone cameras improve. (Photo by Rintaro Shimomura)

TOKYO -- Canon's net profit is likely to shrink 5% this year to 240 billion yen ($2.18 billion) amid a stronger-than-expected home currency and a lackluster performance in its core digital camera operations, the Japanese company said Wednesday.

Sales are expected to edge down 1% to 3.9 trillion yen, with operating profit seen falling 5% to 325 billion yen.

The company expects that the yen's strength against the dollar and euro will erode operating profit by 51.1 billion yen. The company now projects that this year the yen will average 105 against the dollar and 125 against the euro, compared to 110 per dollar and 130 per euro in 2018.

If not for the stronger yen, Canon said profit and revenue would both grow in 2019. It expects a profit boost of about 40 billion yen from cost reduction efforts such as factory automation.

Canon's mainstay digital camera operations are also expected to see continued competition from improved smartphone cameras. Operating profit in the imaging system segment, which includes digital cameras, is projected to tumble 13% to 102 billion yen as sales volume drops over 10%.

Core products like digital cameras and office equipment accounted for roughly 80% of Canon's operating profit in 2018. The company has spent more than 1 trillion yen, or about $9.1 billion, the past decade on acquiring businesses in such fields as medical equipment, surveillance cameras and commercial printers in an effort to develop new earnings sources. But the acquired operation shave yet to make a significant contribution to profits. The operating profit projection for 2019 is less than half the record 756.6 billion yen posted in 2007.

Canon had aimed for a new operating profit high for the three-year period ending in 2020. But Chief Financial Officer Toshizo Tanaka told reporters Wednesday that, "We will have to push back the timeline because of a greater-than-expected contraction in the camera market."

Canon's 2018 net profit climbed 4% to 252.7 billion yen, while sales slid 3% to 3.95 trillion yen.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends June 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media