UPDATE 1-Canon nudges up 2014 profit forecast as office equipment sales grow; Q1 profit up 51 pct

Thu Apr 24, 2014 5:14am EDT

* Operating profit jumps as sales of colour copiers and printers grow

* Canon expects 16.9 bln yen boost to operating profit from weaker yen in 2014

* Still bearish on digital camera sales (Adds context, details from earnings quotes from executive)

By Sophie Knight

TOKYO, April 24 (Reuters) - Canon Inc inched up its 2014 operating profit target on Thursday due to strong sales of office copiers and printers in the first quarter, and said a reshuffle of its camera line-up had also helped boost margins.

Canon said office equipment sales rose by 9.7 percent in the first quarter, helping lift operating profits by 51 percent to a higher-than-expected 82.6 billion yen ($806.76 million).

Camera sales, however, fell by 22 percent year-on-year in the quarter, as the world's biggest camera maker struggled with the prevalence of high-quality smartphone cameras and a saturation in the high-end, single-lens-reflex camera market.

Chief Financial Officer Toshizo Tanaka told an earnings briefing that sales of pricier compact cameras had actually increased after Canon adjusted its camera production and line-up in the first quarter to meet customers' demand for more sophisticated products.

But he said a recovery would take time.

"Determining whether we can achieve the growth we are hoping for will take some time," Tanaka said. "Things are getting better in China and Europe, but it will take a while to see whether that will continue."

YEN BOOST

Canon forecast sales for digital cameras with interchangeable lens to reach 7.6 million units this year, a slight drop from 2013 when the models were first introduced.

"After watching carefully how things go in each market through the second quarter we will re-evaluate our forecasts for the second half, our busiest period," Tanaka added.

Canon said in its quarterly earnings statement it expects an operating profit of 365 billion yen ($3.56 billion) for the year to Dec. 31, a slight increase from its previous forecast of 360 billion yen. The forecast profit would be 8.2 percent higher than the previous year.

With four-fifths of its sales overseas, Canon is a major beneficiary of the yen's weakening over the past year. It said the slide in the yen, triggered by Prime Minister Shinzo Abe's reflationary policies, had added 56.5 billion yen to its revenue in the first quarter.

Canon expected the weaker yen to add 91.8 billion yen to its full-year sales, Tanaka said. He expected annual operating profit to increase by 16.9 billion yen, if the yen remains, on average, at 100 versus the dollar and 135 against the euro.

Canon's share price closed flat ahead of the results, outperforming a 1 percent drop in the Nikkei benchmark index . ($1 = 102.3850 Japanese Yen) (Reporting by Sophie Knight; Editing by Edmund Klamann and Miral Fahmy)