(Updates with executive comment in fourth paragraph.)
April 24 (Bloomberg) -- Canon Inc., the world’s largest camera maker, increased its full-year operating profit forecast as sales of higher-end models benefited from a weaker yen.
Operating income will probably climb to 365 billion yen ($3.6 billion) this year compared with the previous projection of 360 billion yen, Canon said in a statement today. The company raised its sales forecast for this year to 3.86 trillion yen from 3.85 trillion yen.
Canon’s sales are strengthening as a weaker yen makes its cameras, including high-end models aimed at professionals and hobbyists, more competitive overseas. The Tokyo-based company is also cutting costs and has expanded into making medical devices such as eye-care diagnostic instruments.
“We expect sales to increase in the second half of this year,” Chief Financial Officer Toshizo Tanaka said today. “High-end products are selling well, although the market for digital compact cameras is shrinking.”
Canon fell 0.03 percent to close at 3,217 yen in Tokyo trading before the earnings release. The stock has dropped 3.4 percent this year after three straight annual declines.
The company reported first-quarter net income of 47.6 billion yen, a 16 percent increase from a year ago and less than the 48 billion yen average of five analyst estimates compiled by Bloomberg.
Canon said its outlook for the year is based on an exchange rate of 100 yen to the dollar and 135 yen against the euro, unchanged from a January forecast. The currency averaged 102.8 yen to the dollar so far this year.
Sales for the three months ended March 31 rose 6 percent to 868.3 billion yen. Operating profit gained 51 percent to 82.6 billion yen from 54.8 billion yen a year ago, Canon said.
“Domestic businesses, including cameras, did well and this has pulled up the financial result,” said Hisashi Moriyama, an analyst at JPMorgan Chase & Co. in Tokyo. “The currency exchange rate was better than I expected.”
The company plans to reduce costs by 40 billion yen this year, Tanaka said in January. Canon has taken steps to consolidate camera production at overseas plants to cut expenses, he said at the time.
Canon today maintained its annual camera sales forecast by units.
The company expects to sell 7.6 million single-lens reflex cameras in 2014, which is 50,000 fewer than last year, while sales of its compact models are forecast to drop 20 percent to 10.5 million units.
The yen weakened 15 percent against the euro and 9 percent against the dollar in the 12 months ended March 31, according to data compiled by Bloomberg.
--With assistance from Takashi Amano in Tokyo.