Canon Q3 Reports Weaker Demand for Consumables
Japanese-based Canon Inc. reported on October 25, 2022, that its third-quarter (Q3) net income was 49.32 billion Japanese yen (US$440.33 million), significantly higher than last year’s 16.66 billion yen.
“In the first half of the year, we were unable to supply enough products to meet demand due to the shortage of semiconductors and other parts and components, which was made worse by Shanghai’s lockdown.”
“However, in the third quarter, by further promoting design changes and the procurement of alternative parts, we were largely able to produce products in the volume we planned for.”
The Printing Business Unit
Through a recovery in product supply, thanks to the abatement of material shortages, CAnon stated it significantly exceeded the unit sales of last year in each printing category, which contributed to revenue growth. As for profit, lower non-hardware sales in both laser and inkjet printers led to a decline.
When forecasting the future, Canon has decided to reduce its sales plan for printing due to lower demand for laser and inkjet printer hardware, and non-hardware, including those linked to MFDs.
Thanks to the recovery in the number of people coming into the office, Canon has found the replacement of office MFDs (which was stagnant for a time during COVID-19) to be growing again.
The demand for printers, however, has decreased, reflecting a decline in working from home. In terms of print volume, although the recovery was modest in July and August, Canon has found it has been progressing well in Europe and the United States since the beginning of September. Canon expects print volumes to return to a pre-COVID level of about 80% of the volume experience in 2019 Q4.
Canon said it increased production in the third quarter of laser printers and inkjet printers and exceeded the production of the previous year by 20% and 30%, respectively.
However, in Europe, the United States, and Asia, Canon sees a decline in print demand due to the topping out of work-from-home demand. Additionally, dealers tightened inventory due to concerns about the future of the economy and rising interest rates.
For these reasons, Canon has lowered its full-year sales projection for both printer hardware and consumables.
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