Canon's first quarter operating profits tumble 39 percent; lowers FY estimates
Canon's first quarter operating profits tumble 39 percentReuters

Canon, the world's largest camera and printer manufacturer, said on Tuesday that its quarterly operating profit took a dip in the first quarter (Q1), 2016, due to ailing sales of compact cameras around the world and lower demand for laser printers in emerging markets. The camera manufacturer reported a 39 percent decline in operating profits between January and March 2016, to ¥40.1 billion ($361.4 million).

As a result, Canon has lowered its full-year operating profit guidance to ¥300 billion from a previous estimation of ¥360 billion and the consolidated net sales to ¥3,600 billion this year, which marks a 5.3 percent year-on-year decrease.

According to Thomson Reuters, five industry analysts had expected Canon to report Q1 operating profits of approximately ¥67.74 billion.

According to Canon's earnings report (PDF), the breakdown of operating profits for Canon's individual businesses shows a 38 percent decline in its biggest segment of office equipment over the corresponding quarter a year ago. The company's imaging systems, which includes cameras, witnessed a 33 percent year-on-year decline in operating profits to ¥19.6 billion. 

Canon also said the appreciation in the yen's value in Q1 2016 affected the company's earnings during the period. Canon's majority revenue, about 80 percent, is sourced internationally and it expects the U.S. dollar to trade at an average of ¥110 through December from ¥114.91 in the first quarter this year. Sales of Canon's imaging systems fell 10.6 percent to ¥234.8 billion in the quarter from ¥262.6 billion in the year-ago quarter.

Canon has been focusing on other businesses as it reduces its reliance on cameras. With the recent acquisition of Toshiba's medical equipment arm TMSC for ¥688 billion ($6.1 billion) in March, the company aims to strengthen its business foundation for healthcare. Canon said it did not include the TMSC acquisition in the consolidated outlook for this year.

"The impact of the acquisition of TMSC has not been included in the Consolidated Outlook by reason that the clearance process by necessary competition regulatory authorities is still ongoing and the timing of consolidation has yet to be determined," the company said.

Canon had also purchased 85 percent of Swedish video surveillance firm Axis AB in May last year.

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