Canon Inc. -the world's biggest camera maker- increased its full-year profit forecast by 16 % to the highest in four years after the yen weakened. Net income in the year ending Dec. 31 may be 290 billion yen ($3.6 billion), compared with the 250 billion-yen forecast in January, the company said in a statement today. That was less than the 296 billion-yen average of 22 analyst estimates compiled by Bloomberg. Tokyo-based Canon also raised its operating profit and sales forecast for the year. The maker of Ixus and PowerShot digital cameras is raising its forecast after the Bank of Japan's monetary stimulus led the yen to decline 9.9 % against the euro and 7.2 % against the dollar in the first quarter. The weaker yen is helping the company, whose earnings were hurt by Thai floods and Japan's earthquake last year. Canon rose as much as 2.9 % to 36 euros in German trading. The shares advanced 1.5 % to close at 3,800 yen in Tokyo before the announcement. The stock has gained 11 % this year, compared with a 37 % increase for Nikon Corp. and a 4.3 % decline for Sony Corp. the maker of Cyber-shot cameras. Canon, the maker of the EOS range of cameras, said operating profit this year may be 450 billion yen, an increase from the 390 billion yen predicted earlier. Canon raised its sales estimate to 3.9 trillion yen from 3.75 trillion yen predicted in January. The net income forecast for the year will be the highest since the company's 309.15 billion-yen profit in 2008, according to data compiled by Bloomberg. Canon based its profit forecasts on exchange-rate estimates of 79.94 yen to the U.S. dollar, compared with 75 yen previously, and 104.91 yen per euro, revised from 100 yen. The yen's future gains against the dollar will be limited because of the improving U.S. economic outlook, Chief Financial Officer Toshizo Tanaka said. The company generates 80 % of its revenue outside Japan. A depreciation of the currency boosts the repatriated value of overseas sales. The world's second-largest printer maker loses about 9.2 billion yen of annual operating profit for every 1 yen decline in the value of the dollar and 5.4 billion yen of income for each 1 yen decline by the euro, the company said in January, as Bloomberg stated. “The global economy is expected to take considerable time before realizing a full recovery," Canon said in the statement. “The U.S. economy faces such downward risks as high unemployment and falling housing prices, whereas the European economy is projected to remain stagnant for the time being." Income at the office-equipment division, Canon's biggest business, fell 16 % from a year earlier to 52.8 billion yen in the first quarter, while the company's consumer unit, which handles cameras, gained 17 % to 46.7 billion yen. Canon maintained its target of selling 22 million compact cameras and 9.2 million single-lens reflex models this year. Global shipments of digital cameras rose 5 % to 14 million units during the first two months in 2012 from a year earlier, according to the Camera & Imaging Products Association in Tokyo. Shipments in Europe and Asia each gained 18 %, while those in U.S. fell 10 %, the industry group said earlier this month.
