The Japanese Company has also reported that their operating profit and net income also dropped as a result of consumers turning to smartphone camera over traditional cameras.
Operating profit dropped 33.8 percent from the same period last year to US$551 million as net income fell 33.5 percent to US$411 million.
Net sales which were propped up by a 14% increase in printer sales came in at US$8.68 billion.
The company attributed the performance to a sustained hangover from last year's global economic weakness that showed signs of a slowdown in China and Europe and "greater than expected severity in the markets in which we participate."
Canon adjusted its forecasts, saying it now expects to sell 14.5 million compact cameras this year through December, down from 17 million units it had forecast earlier.
Despite weaker camera sales, the company said that it expects a weaker yen versus the dollar to help its overall profit picture.
Canon raised its full-year operating profit forecast by $300 million, with expectations for inflation of its overseas income.
The company said it expects a stronger global economic recovery in the second half of 2013, when the company is planning aggressive sales and marketing activities and new product introductions to improve product competitiveness.