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Canon Trims Profit Forecast But Still Expects Record

30 Oct, 2001

Canon Trims Profit Forecast But Still Expects Record

Canon Inc. trimmed its 2001 earnings forecasts on Monday but said it was still on track for record profits, buoyed by strong digital camera and copier sales despite a dull economy.

The company also reported solid gains in the third quarter, with consolidated net profit up 4.6 percent from a year earlier at 37.5 billion yen ($305.7 million) and operating profit rising 30.3 percent to 78.2 billion yen, on sales of 680.3 billion yen.

For the full year to December, Canon said it expects a consolidated net profit of 161 billion yen, a drop of 14.4 percent from its July forecast of 188 billion yen but up 20 percent from the prior year.

The company also cut its full-year operating profit forecast by 11 percent, to 295 billion yen, on projected sales of 2.89 trillion yen, down from 3.01 trillion yen. The figures were in line with estimates reported by the Nihon Keizai Shimbun business daily last Friday.

Despite strong sales of digital cameras and copiers, the company's revenues from steppers, used to etch circuitry onto semiconductors, and ink-jet printers were expected to be hurt by the weakening global economy.

``Looking at the outlook for the fourth quarter and beyond...the pullback in the U.S. economy will likely last longer than had been expected, with indications of a recovery projected to emerge in the latter half of 2002,'' the company said in a statement.

Canon was also upbeat about its prospects for next year, despite economic uncertainty.

``We are hoping to maintain our earnings at least at the same level (as this year) no matter how bad things get,'' Canon Senior Managing Director Toshizo Tanaka told a news conference.

Friday's Nihon Keizai report spurred a tumble of more than seven percent over the past two sessions in Canon's share price, which has been buoyant compared with other Japanese high-tech shares as the firm boosted market share in copiers and cameras.

Canon ended Monday trade at 3,780 yen, off 2.58 percent on the day, and is down a modest 5.5 percent since the start of the year, outperforming the technology-sensitive benchmark Nikkei average's 22.8 percent decline.

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