Canon revealed on Wednesday its operating profit fell 17.9 percent to Â¥77.7 billion ($US853 million) for the three month period that ended on December 31st. The result comes as demand for compact cameras is shrinking as more customers rely on their smartphones, while smaller and faster mirrorless camerasâ€”a category Canon was slow to enterâ€”is rousing the intrigue of traditional DSLR buyers.
Canon's printer division was affected by weakening demand of its laser printers in cash-strapped European markets. They were also affected by last year's firmness of the Japanese currency as 80 percent of their sales come from overseas. Canon believes the company's earnings will be lifted by economic recovery in India and China, in addition to aggressive economic stimulus policies in Japan.
The company's exchange rate assumption was set for the business year ending in December was set at Â¥85 to the dollar and Â¥115 to the euro, which is weaker than the Â¥79.96 per dollar and Â¥102.8 per euro defined last year.
The company's full year operating profit for the current year through December was forecast at Â¥410 billion, below the average expectation of Â¥443.3 billion profit estimated by 21 analysts, according to Thomson Reuters StarMine.
Over the last year, Canon shares have slipped by approximately 1 percent, below the Nikkei average gain of 31 percent. The shares dropped to a three-year low in July, prompting the company to cut its projections for fear of shrinking demand in China.