Canon sees profit gain on weak yen, rising sales

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News,Business,Japan

TOKYO (AP) — Japanese camera and office equipment maker Canon Inc. on Thursday reported a hefty 16 percent gain in profit for the first fiscal quarter, largely on a favorable exchange rate, but such strong growth wasn't expected to hold up.

Canon's January-March net profit totaled 47.6 billion yen ($467 million) on quarterly sales of 868.3 billion yen ($8.5 billion), up 6 percent on year, as healthy laser printer and copier demand offset shrinking camera sales.

Like other Japanese exporters, Canon got a perk from the falling yen, which lifts the value of its overseas earnings. But Canon and others cannot expect the dollar's rise to continue at the same rate this year.

Canon said the dollar cost 97.84 yen last year, and that it will likely cost 100.61 yen this year.

Canon is projecting a 240 billion yen ($2.4 billion) profit for fiscal 2014, up 4 percent from the previous year, on 3.86 trillion yen ($37.8 billion) in sales, up 3 percent from the previous year.

"As for the outlook in the second quarter onward, there are signs of brightness among developed countries," Canon said. "The global economy, having bottomed out in 2013, is also expected to realize a moderate recovery."

Although camera sales have suffered lately with the arrival of smartphones with digital cameras, Japan saw a big rush to buy cameras ahead of a tax hike that kicked in April 1, the Tokyo-based manufacturer said.

Demand for inkjet printers also increased in Japan for the three-month period, Canon said.

A recovery in the U.S. and European economies was expected to help support Canon's results for the rest of the year. A drop in demand in Japan was likely for the second quarter after the rush to buy ahead of the tax rise, but that was also expected to recover later in the year, according to Canon.

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Follow Yuri Kageyama on Twitter at twitter.com/yurikageyama

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