Japanese technology Canon said today that its business outlook was 'extremely uncertain' as it announced that profits fell in the first quarter after last month's earthquake and tsunami hit production.
Net profit in the three months slipped 2.4% from a year earlier to 55.5 million yen ($680m) while operating profit declined 5%. Sales rose 11% due to healthy demand for printers and digital cameras.
But the strong yen hurt earnings, Canon said. The strength of the Japanese currency has put many exporters at a disadvantage by making their products more expensive overseas and eroding their repatriated earnings.
The March 11 quake and tsunami disaster also damaged inventory assets and caused a shortage of parts, forcing Canon to halt factory lines.
It slashed its earnings forecast for the full year to December, bracing for drops in both sales and profit instead of the growth it had projected earlier. It expects a net profit of 220 billion yen instead of the previously estimated 310 billion yen. The new forecast represents a 10.8% decline from the previous year's result.
'Besides direct damage to buildings and inventory assets from the Great East Japan Earthquake, we have seen indirect impacts such as a power supply cut, parts shortage and lower personal consumption in Japan,' Canon said.
