Canon Q1 profit falls 29% as compact camera sales slump

FEWER MODELS: Canon also said it expects to sell 7.0 million compact cameras in 2015, versus a previous forecast of 7.8 million and 22.5% less than in 2014.

TOKYO: Canon Inc said net profit fell 28.7% in its first quarter, falling short of analyst estimates, as the Japanese company faced slumping sales of digital compact cameras. 

Profit was 33.93bil yen (RM1.01bil) in January-March, compared with the 53.64bil yen (RM1.60bil) average estimate of five analysts according to Thomson Reuters data. 

The result comes as the world's biggest camera maker seeks growth opportunities, in part to offset a drop in demand for compacts as consumers increasingly rely on smartphone cameras. 

It plans to buy Swedish surveillance firm Axis AB for US$2.7bil (RM9.61bil) – offering 340 crowns (RM140) a share until the extended deadline of May 5 – and as of April 24 owned 84%. It does not plan to up its offer even though hedge fund Elliott Management has since raised its ownership to 10%. 

"Sales volume for low-end (digital camera) models declined due to the ongoing contraction of the market in all regions from the previous year," said Canon in its earnings release. Sales of high-end models increased, it said. 

Canon also said it expects to sell 7.0 million compact cameras in 2015, versus a previous forecast of 7.8 million and 22.5% less than in 2014. It projects sales of cameras with interchangeable lenses to reach 5.8 million units rather than its previous view of 6.4 million. 

The firm, which earns about 80% of revenue overseas and is a major beneficiary of a weaker yen, maintained its view of the Japanese currency trading at 120 versus the US dollar in the second to fourth quarters. 

Shares of Canon closed 0.7% higher ahead of the earnings release, versus a 0.2% fall in the broader market. – Reuters