Canon president steps down as forecast misses

Canon Inc. said its president will step down after the world’s largest camera maker forecast profit will increase by less than 1 percent for a second straight year.

President and Chief Operating Officer Tsuneji Uchida, 70, will leave the posts effective March 29 and be replaced by Chairman Fujio Mitarai, 76, the Tokyo-based company said in a statement. Uchida, who will become an adviser, offered to resign as Canon plans to introduce a younger management team, Chief Financial Officer Toshizo Tanaka told reporters.

Net income this year probably will increase to 250 billion yen ($3.3 billion) from 248.6 billion yen last year, the company said in a statement Monday, lagging behind the 304 billion-yen average of 20 analysts’ estimates compiled by Bloomberg. The maker of Ixus and Cybershot digital cameras, copiers and chipmaking equipment is boosting output overseas as gains in the yen make it more expensive to manufacture in Japan. 

“The future remains increasingly uncertain amid growing concern over a global economic slowdown,” Canon said in its outlook for the year.

The company fell 1 percent to 3,435 yen in Tokyo trading Monday, before the earnings announcement. The shares dropped 19 percent last year, compared with a 4 percent increase for rival Nikon Corp.


Currency Gains

Canon, which makes more than half of its sales overseas, based this year’s estimate on the yen averaging 75 versus the dollar and 100 against the euro, appreciations of 5 yen and 11 yen, respectively. The company is investing 15 billion yen in a new office systems venture in Thailand.

The Japanese currency’s gain of 8.9 percent against the euro and 5.5 percent versus the dollar last year reduced the value of earnings repatriated from overseas.

The company wants to sell 22 million units of compact cameras this year, a gain of 17 percent, according to the statement. Sales of digital single-lens reflex cameras, with interchangeable lenses, may rise 27 percent to 9.2 million units.

Global shipments of digital cameras fell 35 percent in unit terms in November from a year earlier, according to the Camera & Imaging Products Association. The shipments declined 4.3 percent for the 11 months to Nov. 30 from a year earlier.

Production setbacks because of floods in Thailand last year will probably be recovered by March, followed by a significant expansion in the second quarter, Masahiro Nakanomyo, an analyst at Barclays Plc, wrote in a note to clients earlier this month.

“The camera industry’s recovery from Thai flooding is proceeding moderately faster than anticipated, including replacement output,” Nakanomyo wrote.

Canon Monday reported fourth-quarter net income of 61.4 billion yen, compared with 54 billion yen a year earlier. Profit in the year ended in December increased 0.8 percent to 248.6 billion yen. 

(Bloomberg)