Canon Expects Profits to Rebound After Tough 2009

Jan. 27, 2010
The company predicts it will return to growth this year with profits increasing 51.9%.

Canon Inc. reported on Jan 27 that net earnings tumbled 57.4% last year to 131.6 billion yen (US$1.5 billion.) Operating profit slid 56.2% to 217.1 billion yen as revenue fell 21.6% to 3.21 trillion yen.

While the company is enjoying strong demand for its single-lens reflex cameras, a slump in demand for office equipment and printers due to the global economic downturn has taken a heavy toll on its bottom line.

Canon managing director Masahiro Osawa said that 2009 was an "unprecedentedly severe year" due to the global economic downturn and strong yen.

While demand for copy machines was expected to remain weak, Canon forecast brisk electronics sales in Asia and other emerging economies, he said.

Canon's sales in Asia made up about 19% of the total in 2009 and the figure is likely to rise as Chinese consumers become wealthier, Osawa said. "The Chinese market has been favorable to sales of single-lens reflex (SLR) cameras. China will become an important target," said Osawa.

Canon expects its digital camera sales to rise 6% in 2010 to 25 million units, anticipating 5% growth in the overall global market to about 121 million units.

The maker behind the EOS SLR and the PowerShot and IXY compact cameras said it expects to return to growth this year after two straight annual declines, predicting net profit will jump 51.9% to 200 billion yen.

The company said operating profit would increase 52% to 330 billion yen as revenue goes up 7.5% to 3.45 trillion yen.

Canon is bidding for Oce, the Dutch manufacturer of office printers, in a friendly takeover worth 730 million euros (US$1.03 billion.) Although some Oce shareholders have reportedly rejected the tender offer, Canon said it would not sweeten the deal. "We believe that our offering price is reasonable," Osawa said.

Copyright Agence France-Presse, 2010

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