Canon’s results for the third quarter, which show a net income decline of 55.8 per cent over the previous year, has prompted concern about the continued health of the business IT sector.
The vendor has seen its total sales fall by 21.5 per cent since the same period last year, while net income dropped by 55.8 per cent to $408 million.
While the company did acknowledge that government efforts across the globe have helped alleviate problems and encourage spending in the consumer market, it said “they have not proven enough to remove the sense of uncertainty about the future amid such factors as the continued severity of employment conditions.”
Although Canon has significantly reduced its operating expenses and has seen a slowing in the rate of decline, it is still being hurt by low demand and a low conversion rate for the Japanese Yen.
“Net sales for the third quarter totaled $8.6 billion, a year-on-year decline of 21.5 per cent, largely due to the effects of reduced sales volumes of office equipment and other products, a trend that continued from the previous quarter, along with the substantial rise in the value of the yen,” stated Canon’s financial report.
“Despite the launch of new products and ongoing cost-cutting efforts aimed at an improved gross profit ratio, the significant impact of such factors as the appreciation of the yen and reductions in sales volumes led to a 3.1 point decline in the ratio to 45.1 per cent for the quarter and 44.1 per cent for the nine-month period. Consequently, gross profit decreased by 26.5 per cent to $3.8 billion for the quarter, and by 34.5 per cent to $11 billion for the three-quarter period.”