Canon Q1 2019 financial results are out: “significant decline in sales and profits”


Canon published their Q1/2019 financial results:


Current:

For Imaging System, the contraction of the market for interchangeable-lens cameras, mainly for DSLRs, continued in step with the proliferation of smartphones, resulting in a significant decline in sales and profits.


Outlook:

As for Imaging System, we revised our outlook significantly for the pace of market contraction, mainly for interchangeable-lens cameras. As a result, we lowered our sales and profit projection. We will, however, work to recover profitability as we head towards the second half of the year by strengthening efforts to improve our product mix and activities to reduce costs.


Additional info on Imaging Unit:

Within the Imaging System Business Unit, Canon maintained the top share of the overall interchangeable-lens digital camera market, mainly in key countries in Europe and the Americas as well as in Japan and China. Sales growth for mirrorless cameras was higher than the market average, thanks to such models as the EOS R, equipped with a full-frame sensor, and the entry-class EOS Kiss M. However, unit sales decreased overall compared with the same period of the previous year, mainly due to the more rapid decrease in demand than expected resulting from both the shrinking market and the slowdown of the Chinese economy. As for digital compact cameras, unit sales decreased compared with the same period of the previous year amid the shrinking market. For inkjet printers, unit sales of refillable ink tank models increased mainly in emerging markets. However, unit sales decreased overall compared with the same period of the previous year, due to decreasing demand for home-use models in developed countries. As a result, sales for the business unit decreased by 17.0% to ¥176.3 billion year on year, while income before income taxes decreased by 81.1% year on year to ¥5.0 billion.

In the first quarter, sales of interchangeable-lens cameras were down 19% to 850 thousand units. This reflects the combined impact of accelerated market contraction for DSLRs, in particular entry-level models, and economic slowdown in China, which is a sizeable market for interchangeable-lens cameras.

The habit of capturing images with smartphones with improved cameras has become a part of daily lives of consumers. As a result, the market for entry-level DSLRs is contracting at a pace that exceeds the outlook we had at the beginning of the year. That said, we expect the user base of professionals and advanced-amateur, people who value the image quality and expressive possibilities afforded by cameras with large sensors and an abundance of interchangeable-lenses to remain. For the market overall, however, we expect the trend of market contraction to continue for some time.

In light of these circumstances, we decided to reexamine our full-year projections for the market and our own unit sales. We now expect the market and our own unit sales to decline 17% to 8.6 million units and 4.2 million units, respectively.

Mirrorless cameras, known for being small and lightweight, are increasing their presence in the market. Amid this situation, we will steadily shift our focus from DSLR to mirrorless cameras with the aim of maintaining our overwhelming competitiveness, which we have built upon DSLRs.

From Reuters:

The camera and printer manufacturer slashed its annual profit forecast to 335.5 billion yen ($2.99 billion) from 378.5 billion yen. The revised outlook compared with analysts’ estimate of 375.4 billion yen, according to Refinitiv data.

Operating profit for the quarter ended September dropped 12.4 percent to 68.3 billion yen ($610 million), compared with a year-ago profit of 78 billion yen, the Tokyo-based company said.

Via Canon

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