Canon Blames a Weak Market for its Woes

Canon says its poor performance and outlook are a result of the global economic slowdown and the negative impact of its foreign exchange rate.

Canon’s shares have fallen 3.3% in the last month to $27.30 per share.  It holds one of the largest market caps at US$36.6 billion compared to other printer OEMs. The brand has struggled to maintain the value of its shares compared with the previous financial year. By comparison HP has US$24.4 billion, Kyocera has $18.0 billion and Xerox has $10.1 billion in market caps.

Canon’s woes include falls of:

1. 11.7% in net sales in 2Q2016;

2. 15.0% in sales of office systems;

3. 13.5% in sales of imaging systems;

4. 2.8% in gross profit margin;

5. 34.5%, in operating income;

6. JN¥53.4 billion (US$520 million) in net income;

7. 48.94 yen (US$0.48) in Earnings Per Share (EPS);

8. 10.2% in cash reserves.

The company is predicting a fall of 7.4% in net sales in its 2016 fiscal year to JN¥3.5 trillion (US$3 billion). It also expects a 25.4% decline in operating profit of JN¥265.0 billion (US$2.59 billion) compared with the previous year. That is based on a fall of 18.3%, or JN¥180.0 billion in net income.

One glimmer of hope coming from Canon’s performance were sales on other segments which rose by 5.8% this year compared with last year.

A fuller report of the Market Realist analysis of Canon’s performance can be seen at tonernews.com

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