86% Drop In Profits For Canon Inc.

Canon Inc. said second quarter profit sank 86 percent as the global economic malaise weighed on sales of its copy machines, printers and digital cameras while a stronger yen took a bite out of overseas earnings.

The electronics manufacturer said Tuesday its net profit was 15.6 billion yen ($164 million) for the April-June quarter, down from 107.8 billion yen a year earlier. Revenues declined 28 percent to 793.8 billion yen, from 1.11 trillion yen last year.

For the current fiscal year through December, the company cut its revenue target to 3.20 trillion yen from 3.33 trillion yen. It held its profit target steady at 110 billion yen, which would mark a 64 percent yearly decline.

Canon, which brings in three-quarters of revenues from overseas, was hurt by the stronger yen compared to a year earlier. The company said the rise in the Japanese currency has taken about 151 billion yen from its revenue over the first six months of the year, compared to last year.

A stronger yen means sales abroad are worth less when repatriated to Japan.

A lone bright spot for the company was its SLR, or single-lens reflex, cameras, where demand was steady. But its overall camera business suffered as selling prices of cheaper digital models continued to fall rapidly.

Unlike many Japanese companies, Canon's fiscal year matches the calendar year. The company reports earnings under U.S. accounting rules.