Canon sees record 2002 net despite slow Q1

TOKYO: Office machine maker Canon Inc said on Monday it expected a record

group net profit in the business year to December despite a slide in the first

quarter, buoyed by the outlook for new products and a weak yen.

The company projected a consolidated net profit in the year to December 31 of

178 billion yen ($1.37 billion), a record figure and above its January forecast

of 170 billion yen, despite a 26 percent drop in its first-quarter net to 32

billion yen.

The upbeat forecasts helped spur a gain in Canon's shares, which closed

morning trade up 3.7 percent at 5,040 yen, nearing a nine-month high of 5,100

hit early this month. Although first-quarter earnings were depressed by

inventory adjustments for laser-beam printers, a key profit generator, new

printer products due in the second half of the year were expected to fuel a

sharp recovery in that division, a spokesman said.

New product offerings have also bolstered sales of copiers and digital

cameras, while the weak yen gave an added boost to its bottom line by raising

the yen-based value of income earned overseas. Canon relies on overseas markets

for more than 70 percent of its revenues.

The company's strong earnings performance in recent years is in sharp

contrast to losses at many other Japanese high-tech manufacturers, which were

hit hard by the info-tech slump and intense foreign competition. The Canon

spokesman said revenues in the first quarter were 651 billion yen, down 8.9

percent from a year earlier, while pre-tax profit fell 15.9 percent to 62

billion yen.

Despite the decline, the first-quarter pre-tax profit figure handily exceeded

the company's forecast of 47 billion yen, aided by reforms in manufacturing

processes that substantially reduced inventories.

For the full year to December, Canon expects revenues of 2.99 trillion yen,

up 2.75 percent from a year earlier and above the January forecast of 2.96

trillion yen. The full-year pre-tax profit forecast was raised to 317 billion

yen, up 12.6 percent from a year earlier, from a prior projection of 295 billion

yen.