Japan's Canon sees two-thirds drop in profit in 2009

TOKYO: Japanese high-tech giant Canon Inc. warned on Wednesday the economic crisis would drive down profits by two-thirds in 2009, after a 91 percent plunge in the fourth quarter of last year.

Canon, often hailed as a success story in Japan's recovery from a recession a decade ago, expects to avoid falling into loss - unlike some rivals - thanks to the popularity of its digital cameras.

But it has not escaped the fallout from the financial crisis, which has reduced demand for electronics and pushed up the yen, eroding export earnings.

Canon logged a net profit of 11.62 billion yen ($130 million) in the fourth quarter of 2008. Operating profit fell 81 percent to 35.83 billion yen.

The camera market is seeing increasingly tough competition, said Canon managing director Masahiro Osawa.

"The rapid deterioration in the economic environment since the autumn has triggered a global slump in individual consumption. This has caused damage to the digital camera market beyond our expectation," he told reporters.

Net profit fell 37 percent in 2008 to 309.15 billion yen. Operating profit dropped 34 percent to 496.07 billion yen as revenue declined 8.6 percent to 4.09 trillion yen.

For 2009 Canon expects a much lower net profit of 98 billion yen, operating profit of 160 billion yen and revenue of 3.5 trillion yen.