Canon's Profits Plunge in First Half

Sluggish sales and a strong yen batter the Japanese electronics manufacturer.

Japan's Canon Inc. said Tuesday its net profit tumbled 84.5% in the first half of 2009 from a year earlier, hit by sluggish sales of compact digital cameras and other electronics. The yen's strength against other currencies also ate into profits at Canon, which relies heavily on overseas markets for sales.

The photographic and office equipment maker said net profit plunged to 33.35 billion yen (US$351 million) in the six months through June, the first half of its business year, from 214.49 billion in the same period of 2008. Operating profit slumped 80.4% to 64.94 billion yen as revenue slid 29.9% to 1.48 trillion yen, a company statement said.

Canon has enjoyed strong sales of high-end digital single-lens reflex (SLR) cameras in recent years, but it has not been immune to the global economic downturn, which has battered Japanese electronics makers.

For the second quarter through June, Canon announced a drop of 85.5% in net profit to 15.6 billion yen from a year earlier.

For the whole of 2009, Canon left its net profit forecast unchanged at 110 billion yen. It raised its operating profit projection to 190 billion yen from 180 billion but trimmed its revenue goal to 3.20 trillion yen from 3.33 trillion.

"I suppose that stimulus measures from various countries will eventually kick in," said managing director Masahiro Ohsawa. "But at this point, our view is that a recovery in office equipment will be difficult to achieve in the near future. We believe consumer products will lead the economic recovery."

Copyright Agence France-Presse, 2009

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