A weak yen and continued strength in digital camera sales drove Canon's 2Q earnings growth of 17% to ¥123.93 billion ($1.03b), topping its own projection of ¥118.75b, on 9.5% higher sales to ¥1.13t ($9.42b). However, for the full fiscal year (ending March) Canon lowered its net profit forecast to ¥500b ($4.17b) from ¥505b, on larger-than-expected depreciation costs. Given the weak yen, which boosted its operating profit by ¥99.5b ($830m), Canon raised its full FY sales forecast by about 1% to ¥4.58t ($38.2b). Canon's ordinary shares lost 2.3% to ¥6,890 ($57.46 ADR equiv. at ¥119.9/$1) ahead of its earnings release, on broad market weakness. Its ADRs fell 1.15% to $58.20 on Wednesday.
Sources: Full earnings press release and presentation [pdf], Bloomberg, MarketWatch, Reuters
Commentary: Hewlett-Packard, Canon Lead the Peripheral Device Industry • Japanese Exporters Look Poised to Profit from Weak Yen • Are Printer Companies Chasing the Wrong Target?
Stocks/ETFs to watch: Canon Inc. (NYSE:CAJ). Competitors: SNE, HPQ, EK, XRX. ETFs: BLDRS Asia 50 ADR Index (NASDAQ:ADRA), iShares S&P/TOPIX 150 (ITF)
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