Canon hit by strong yen and slowing demand

The economic malaise also affects Canon. Compared to 2007, net profit in the third quarter fell by 21.1 percent to 726 million euros, while turnover fell from 9.2 billion euros to 8.6 billion euros.

Canon blame the sharp decline in profit and turnover, partly due to the increased exchange rate of the yen against the dollar. Office equipment sales, such as printers and copiers, declined 11 percent, while the Business Machines division’s sales declined 5.1 percent due to a sharp fall in demand for PCs in Japan. The sale of dslr’s was on the rise, partly due to the Eos 450D and the Eos 40D introduced at the beginning of this year, while sales of compact cameras remained the same. Nevertheless, the Camera division recorded 6.8 percent lower sales in the third quarter compared to a year earlier due to the high exchange rate of the yen and lower sales prices due to strong competition. As a result, the operational profit of the Camera division fell by no less than 41.3 percent.

The outlook for the fourth quarter is not much better. Canon expects net profit in that quarter to decline from Euro 1.1 billion in 2007 to Euro 674 million in 2008, while sales will decline from Euro 11 billion to Euro 10.1 billion. The company does expect the sale of dslr’s to increase further. This is mainly due to the recent introduction of the Eos 50D and the Eos 5D Mark II.

Canon lowers its expectations for the whole of 2008: instead of the previously forecast net profit of 4.73 billion euros, the Japanese company now assumes 3.28 billion euros. Turnover for the whole of 2008 is expected to amount to approximately EUR 37 billion, compared to EUR 40.09 billion previously.