Canon profit drops

TOKYO: Canon’s first quarter profit dropped slightly on costs from an acquisition and it warned that full-year earnings would take a hit from disrupted production due to Japan’s earthquake and tsunami.

Its net profit for the January-March quarter slipped 2.4% to 55.5bil yen (RM2.03bil) from 56.8bil yen (RM2.08bil) a year earlier.

Costs related to Canon’s March 2010 acquisition of Dutch printer and scanner company Oce NV increased operating expenses by 42bil yen (RM1.54bil), which took a bite out of profits.

Sales increased 11.1% to 839.2bil yen (RM30.7bil), with the economic recovery in the United States and parts of Europe sustaining demand for laser printers and other office equipment.

Demand was also brisk for point-and-shoot digital cameras in emerging markets such as India and China, the company said.

However, with last month’s disasters dimming the company’s outlook, Canon lowered its forecasts for the full fiscal year through Dec 31.

Canon suffered damage to buildings and inventory and experienced production holdups due to electricity restrictions and other factors.

“Shortages in the supply capacity for certain products are expected to continue,” it said.

Canon now expects to book a net profit of 220bil yen (RM8.06bil) on sales of 3.75 trillion yen (RM137bil). Back in January it estimated a net profit of 310bil yen (RM11.4bil) and 4.1 trillion yen (RM150bil) in sales.

The company’s net profit for 2010 was 246.6bil yen (RM9bil) on 3.7 trillion (RM135.5bil) in sales.

Unlike many Japanese companies, Canon’s fiscal year matches the calendar year. Canon bases its earnings on US accounting standards. — AP

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