Canon posts record first-half profit; raises 2004 profit forecast
, 07.28.04, 4:07 PM ET
TOKYO, Jul 28, 2004 (AFX-UK via COMTEX) -- TOKYO (AFX-ASIA) - Japan's top office equipment and camera maker Canon Inc reported a record first-half to June net profit of 160.8 bln yen, up 25.8 pct from a year earlier on the back of strong overseas demand for digital cameras.
Sales grew 7.3 pct to 1.65 trln yen.
It said pretax profit for the period rose 20.6 pct to 260.0 bln yen.
"Although sales of digital cameras slowed in the domestic Japanese market, demand overseas continued to grow significantly," the company said in a statement.
Overall camera sales jumped 22.4 pct to 347.3 bln yen, with sales of digital cameras surging more than 70 pct.
Sales of business machines such as printers and copiers edged up 0.7 pct to 1.14 trln yen.
Spurred by the results, Canon raised its earnings forecasts for the full year to December 2004. It now expects to post a profit of 320 bln yen, up from an earlier forecast of 309 bln and an actual profit of 275.7 bln in the year to December 2003.
It now estimates full-year pretax profit at 520 bln yen, up from the initial forecast of 500 bln, and revenue at 3.47 trln yen, up from 3.40 trln.
The company reported first-half sales in Asia and China grew 27.3 pct to 224.2 bln yen and those in Europe rose 11 pct to 515.6 bln yen.
Sales in the US, Canada and the South America, however, slipped 3.2 pct to 494.9 bln yen.
While total sales grew, Canon noted the strength of the yen against the dollar constrained its revenue as a rising yen slashes the value of overseas income for exporters like Canon when repatriated.
"One of the challenges that Canon faces is the establishment of stable business management that offers resilience against the influence of exchange rate fluctuations. With an overseas sales ratio of more than 70 percent, we are heavily exposed to this risk," the company said.
It said some 53.9 bln yen in revenue was lost due to the strong yen.
Throughout the year, the company expects to lose 85.4 bln yen due to the yen's appreciation against the dollar.
It said it will attempt to minimize the impact of a strong yen "by increasing product development speed, which will facilitate the introduction of new products priced to reflect the latest foreign exchange levels," as well as further reducing costs.
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