Camera and printer maker Canon (NYSE:CAJ), one of Japan�s principal exporters, is taking a cautious approach to the short term.
Along with its fourth-quarter report, the company announced this week that its current president, 70-year-old Tsuneji Uchida, will step down in March to allow 76-year-old Fujio Mitarai, the current chairman and CEO, and a former company president, to retake the title as president. Uchida will become an adviser to the company.
The move is hardly disruptive, although it�s not clear whether the leadership shift will mean a significant change in business strategy. Mitarai is well-respected in the Japanese business world, having increased Canon revenues 70% during his first run as president. The Wall Street Journal raises concerns, however, that great respect for Mitarai won�t necessarily translate to improved financial performance, since someone regarded as nearly infallible is less likely than a new leader to face constructive criticism.
But it does seem as though Mitarai took the position out of necessity rather than desire; Canon expressed hopes that a younger replacement could be found in coming years while admitting that a suitable candidate could not be found at this time.
Canon emphasized that the power change was Uchida�s decision and not a consequence of misgivings about the company�s fourth-quarter earnings, which fell short of analyst expectations in some places but wasn�t devastating. Losses were largely due to external events that impacted the company in 2011: the earthquake in March, which was quickly followed by massive flooding in Thailand. In addition, the strong yen drove down operating profit. Canon�s primary markets are overseas, where the relatively weak U.S. dollar and Euro hindered competitive pricing and diminished profits returning to Japan.
Operating profit for the fiscal year declined 2.4% to 378.1 billion yen ($4.9 billion) from 387.6 billion yen ($5.1 billion) the previous year. Quarter to quarter, operating profit increased more than 14%, to 94.6 billion yen–2% higher than analyst predictions of 92.4 billion yen.
Net sales were down 4% for the fiscal year and down 9.7% quarter-on-quarter. Net income, however, rose nearly 14% year-over-year, although it climbed only 0.8% over the full fiscal year, from 246.6 to 248.6 billion yen. Revenue was down 9.7%, to 964.76 billion yen, from 1.068 trillion yen.
The company�s outlook is conservative, with 2012 net income expected to increase to 250 billion yen, which would mark the second year of increases below 1% and fall almost 18% short of the 304 billion yen analysts predicted. Operating profit is expected to increase 3.2%, to 390 billion yen, while revenue is expected to increase 5.4%, to 3.75 trillion yen.
Share values have dropped 18% since last year, although that�s not too far behind the current industry average of 14%. It�s likely that Canon will exceed its own estimates for 2012, barring further environmental disasters. The company has several notable projects due for release this year, including the PowerShot G1X, which made a promising debut at the International Consumer Electronics Show earlier this month. Canon this week also announced plans to build a laser printer production facility in the Philippines in response to increasing global demand.
No comments:
Post a Comment