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Japan Canon's profits plunge in 2008

(Agencies)
Updated: 2009-01-28 16:28

TOKYO - Canon Inc., one of Japan's largest exporters, said Wednesday its net profit fell by over a third last year, as the stronger yen ate into its overseas profits and sales were lower for almost all of its products.

A man looks at a Canon camera displayed at an electronics store in Tokyo January 28, 2009. [Agencies]

The maker of cameras, copy machines and printers said it had a dismal fourth quarter and expects this year to be even worse than 2008, forecasting a 70 percent plunge in profit.

Canon said net profit for 2008 fell to 309.15 billion yen ($3.47 billion), a 37 percent drop from the 488.33 billion yen it made last year. Revenues fell nine percent to 4.09 trillion yen from 4.48 trillion yen.

Over the last three months of the year, net profit was less than one tenth of what it was a year earlier, at 11.6 billion yen versus 127.8 billion yen.

For 2009, the company said it expects profit to drop to 98 billion yen as revenues slide to 3.5 trillion yen.

Like its peers at home and abroad, Canon's sales have plunged as the consumers and companies that buy its products cut back on spending. It reported lower sales of major products including business copiers and computer printers.

The company, which got nearly 80 percent of sales from abroad last year, was also hit hard by the strong yen. The Japanese currency has largely stayed below the 90-yen level against the dollar in recent months, near its lowest point in over a decade.

Canon, seen as a bellwether exporter by many investors due to its reliance on foreign sales, said it expects sales abroad to fall by almost a fifth this year.

Last year it fell victim to the yen's strength even in the rare cases it was able to maintain sales. The company said it increased the number of digital cameras it sold by four percent last year, but falling prices and foreign currency meant revenues fell nearly 10 percent.

Canon said foreign exchange movements hurt its revenue by 300 billion yen, a figure it expects to jump to over 400 billion yen this year.

Canon's shares inched up 0.4 percent to 2,590 yen in trade Wednesday, in line with the 0.6 percent gain in the benchmark Nikkei 225 index. It announced its results after the market closed.

Unlike many other Japanese companies, Canon's fiscal year matches the calendar year.