Japanese camera and printer maker Canon Inc. on Monday slashed its outlook for the fiscal year and said third-quarter profit plunged as weaker sales and a stronger yen hit its bottom line.
Canon's net profit was 83.04 billion yen ($883.4 million) in the July-September period, down 21.1 percent from 105.3 billion yen a year earlier. Quarterly sales slipped 6.2 percent to 985.99 billion yen ($10.49 billion) from 1.05 trillion yen.
The electronics maker said revenue from most of its main products suffered during the quarter as the global economy slowed. Sales of color copiers were hurt by falling purchases by businesses and price wars dragged down income from digital cameras even as unit sales rose.
Canon's bottom line was also hit by the stronger yen. The company generates 80 percent of revenues overseas and is seen as a bellwether exporter by many investors.
A stronger yen cuts into the profits of products sold overseas by Japanese manufacturers. The yen has surged against foreign currencies recently, Friday hitting the 90-yen level against the dollar for the first time in 13 years.
Canon cited the stronger yen as a major factor for slashing its fiscal year net profit forecast by 25% to 375 billion yen ($3.99 billion) from 500 billion yen. The new forecast for the year through December is well below the 448.32 billion yen consensus of analysts polled by Thomson Financial.
The company said foreign exchange movements hurt its revenue by 32.2 billion yen ($342.6 million) in the third quarter with the full year hit to revenue to amount to 278.3 billion yen ($2.96 billion).
But Canon said there were still some positives in the latest quarter. Revenue from printers and other computer peripherals crept up 1.3 percent despite the foreign exchange hit, and sales of its highly profitable single-lens reflex cameras were also strong.
Canon's shares fell 11 percent to 2,375 yen in trade Monday while Japan's main Nikkei 225 fell 6.4 percent. It announced its results after market close. The company's shares are down almost 60 percent over the last three months.