Canon Half-Year Profits Zoom

Despite the concerns, Canon said on Thursday that it expects its parent current profit to hit a record high in the year to the end of December for a second consecutive year.

Canon announced that its parent current profit for the January-June period more than doubled from a year ago to Y63.74 billion ($590 million), helped by a 32 per cent rise in sales of laser-jet and bubble-jet printers.

The yen's lower value against the US dollar and German mark also contributed Y30 billion ($277 million) to its profits during the period, Canon said. Exports account for 80 per cent of sales.

 

Profits exceeded our original predictions by more than 30 per cent, Canon director Toshizo Tanaka told a news conference.

Helped by a global boom in personal computers, sales of printers reached Y340 billion ($3.14 billion) during the six-month period, accounting for more than 50 per cent of Canon's total sales, Tanaka said.

But sales of copiers fell four per cent due to an economic slump in Germany and France, he said.

Despite slower capital investment by semiconductor makers following a plunge in memory chip prices, Canon's sales of steppers - equipment used for semiconductor production - grew about 30 per cent during the six months, he said.

However, Canon expects a slump in the semiconductor industry to slow its earnings growth in the second half of the business year. It said it expects stepper sales to slump early next year due to Japanese chip makers' moves to postpone capital investment, although it anticipates a pickup in sales after next June.

We originally anticipated a 60 per cent sales gain in steppers for this year, but revised downward the estimates due to a semiconductor slump, Tanaka said.

Intensifying price competition for bubble-jet printers is also a worrying factor, he said.

Canon said its forecast for record profits this year was based on higher sales for printers and cameras including a new format compact camera called the advanced photo system (APS).

The APS photo system uses silver-based film with a smaller frame size than the conventional 35 mm. Technical shooting details can also be recorded on the film and the technology enables manufacturers to make smaller and lighter cameras. Pictures from APS cameras can also be viewed on computer screens.