- Canon (CAJ +4.6%) Q3 net sales dipped 12.7% Y/Y led by major slump in office segment (-21% Y/Y).
- Despite recording drop in sales, structural reform and expense cutting drove imaging system profitability higher to 167% Y/Y growth while industry & others reported a surge of 49.8% in operating profit.
- Free cash flow as of Sep.30 increased by ¥87.5B to ¥500.3B from prior year period.
- Recovery is expected to continue in Q4:
- For FY20, Canon updated its estimates led by increased sales and profit of new businesses. For office and medical system projections were lowered while for imaging system and industry & others projections were raised.
- Cash flow is seen improving by increasing profit, limited capital expending; it targets to secure same level of cash-on-hand as prior year (1.5 months of sales).
- Also Read: Q3 Earnings Call Presentation
- "When one includes its strong equity position, its profitability, the dividend and its valuation, there is a lot to like here for the patient investor," wrote Individual Trader on Seeking Alpha.
- Previously: Canon EPS beats by $0.14, misses on revenue (Oct.26)