Canon’s stock price has taken a huge fall after the company reported its earnings for the year’s first quarter, while cutting down its revenue forecast.
Canon is the biggest camera vendor in the world. However, cameras sales have dramatically decreased, following the improvement of image sensors in high-end smartphones.
Canon stock goes down amid forecast miss
The Canon stock plunged 5.7%, which is the company’s biggest decay since July 26, 2012. It appears that the company traded in a 3,645 ten, after it announced that its net income will reach only 290 billion yen / $2.9 billion throughout 2013. The amount is lower than the expectations of a team of analysts, who predicted that Canon will gather 308 billion yen / $3.08 billion this year.
Additionally, Canon has reduced
The company may be on the verge of replacing the EOS M with a new version, while a higher-end mirrorless camera is also in the works, sources say. However, it is unknown whether they will be enough to bring back the customers.
Weaker yen is doing more wrong than right
However, the net income is expected to increase thanks to a weaker yen when compared to the US Dollar and European Union’s Euro. Unfortunately, sales in Europe have decreased, while the Chinese market is not doing better either.
Canon announced that Q1 2013 has been disastrous in terms of net income, which has dropped down by 34% to 40.9 billion yen. It is worth mentioning that analysts’ worst-case scenario predicted a 51.9 billion yen income.
Not a single business is doing well, but the camera situation is almost desperate
The decrease has been caused by 1.5% weaker sales, claims Canon. The company’s problem is that none of its businesses is doing well. Nevertheless, the most alarming industry is the camera one, as overall digital camera sales have been cut in half to 4.26 million in February 2012.
Analysts say that this is the 10th consecutive month which has experienced a reduction in camera sales. Experts say that Canon’s fall is not good news for its competition. As the biggest vendor is going through tough times, it is hard to imagine that others are doing better.
It is very unlikely that things will change anytime soon, as the yen is getting weaker. It remains to be seen whether the analysts are right or not and whether Canon will manage to make a successful recovery by the end of the year.