Canon Saw 28.7% Decline in Net Profit

Canon Saw 28.7% Decline in Net Profit

Canon reported a 28.7% decline in its net profit for the first quarter of 2015 fiscal year. The company said net profit dropped to 33.9 billion yen (US$ 284 million) for the January-March period, while operating profit fell 19.9% to ¥ 66.2 billion (US$ 554.6 million), on sales of ¥857.4 billion (US$ 7.2 billion), down 1.3%.

It said slower camera sales and an increase in the cost of research led to the decline in profit, although the firm saw steady demand for laser printers and copy machines.

According to Canon, during the first quarter, MFDs (multifunction copier/printers) and laser printers enjoyed steady growth that has continued from the previous year.

Looking at Canon’s first-quarter performance by business unit, within the Office Business Unit, as for office MFDs, despite the healthy demand for new imageRUNNER ADVANCE C350/C250-series models, color A4 (letter and legal-sized)-model imageRUNNER ADVANCE machines, and the imagePRESS C800/C700, color Mmodels targeting the light production market, total sales volume decreased slightly from the year-ago period due to slow demand in Asian countries and the rush in demand in Japan during the first quarter of the previous year that preceded the country’s consumption tax increase. As for high-speed continuous-feed printers and wide-format printers, sales of the Océ ColorStream 3000 series showed solid growth. Among laser printers, although sales volume decreased in Japan as a result of the rush in demand during the same period of the previous year leading up to the consumption tax hike, sales volume overall increased owing to steadily growing demand in other regions. As a result, coupled with the positive effects of favorable currency exchange rates, sales for the business unit totaled ¥529.1 billion, a year on year increase of 3.9%, while operating profit totaled ¥71.7 billion, declining 1.0% due to the increase in R&D and other expenses.

Inkjet printers fall within the Imaging System Business Unit. Although sales volume in the U.S. increased from the same period of the previous year thanks to sales promotions for new products featuring enhanced mobile-device compatibility for which demand is increasing and MAXIFY business-model inkjet printers, total sales volume declined slightly due to economic stagnation in emerging countries and the previous year’s rush in demand in Japan leading up to the hike in the country’s consumption tax. As a result, sales for the business unit decreased by 10.3% to ¥262.7 billion year on year, while operating profit totaled ¥29.1 billion, a decline of 30.7%.

Canon lowered its earnings guidance for the 2015 fiscal year. It now expects a net profit of Y255 billion on revenue of Y3.86 trillion. The company had earlier expected earnings of Y260 billion on revenue of Y3.9 trillion.

Demand for MFDs is projected to expand moderately, mainly for color models. Likewise, demand in the laser printer market is also expected to continue growing moderately, centered on multifunction models.

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