TOKYO, JAPAN - Japan's Canon Inc reported a 5 per cent fall in quarterly operating profit and slashed its annual outlook to below market expectations as it tries to deal with a quake-hit supply chain that it said was months away from being fixed.
Canon, which competes against Sony Corp and Nikon Corp in cameras and Xerox Corp and Ricoh Co Ltd in copiers, said a recovery of the supply chain to levels before last month's earthquake was not expected until June or July.
The world's largest maker of digital cameras on Tuesday lowered its operating profit forecast for the business year to end-December was 335 billion yen (S$5.06 billion), 29 per cent lower than its earlier estimate.
That is below an average estimate of 396.5 billion yen in a poll of six analysts taken after the quake by Thomson Reuters I/B/E/S.
"The company's revised forecast suggests a tough year for the firm," said Naoki Fujiwara, a fund manager at Tokyo-based Shinkin Asset Management, but added that Canon's issuance of a forecast at all was positive while so many manufacturers were expected not give them.
"I think (the disaster) will have a temporary impact on supply but we have to wait more to see its impact on demand," he added.
Canon slashed its sales target for digital compact cameras for this year to 20 million from 23 million.
For the January-March quarter, its operating profit came to 82.5 billion yen ($1.0 billion), against 86.84 billion yen in the same quarter a year earlier. That was above an average estimate of 77.1 billion yen in a poll of three analysts taken after the quake by Thomson Reuters I/B/E/S.
By Monday's close, the company's shares had fallen about 7 per cent per cent since the quake versus a decline of almost 6 per cent in the benchmark Nikkei average .
Shares of Canon closed 0.9 per cent lower at 3,495 yen before the results announcement, tracking a 1.2 fall in the Nikkei.