* Sees 2014 revenue up 3.2 pct, printer sales strong
* 2013 profit up, but below estimate amid weak camera sales
* CFO sees yen close to current levels for "a few years"
By Sophie Knight
TOKYO, Jan 29 Japan's Canon Inc said it
expects modest growth in revenue this year, counting on the yen
staying weak to boost the value of its exports while Europe's
economic recovery fuels better sales of office equipment.
One of the first of Japan's technology firms to report
earnings, Canon on Wednesday forecast a 3.2 percent rise in
revenue for 2014. It said it's expecting the yen to hover for
some time around its current levels - about 23 percent weaker
than a year ago - offsetting falling camera sales for now.
With four-fifths of its sales overseas and nearly half of
its production at home, Canon gets more of a boost than many
other Japanese companies from "Abenomics", the reflationary
economic policies of Prime Minister Shinzo Abe that have
weakened the yen.
Revenue rose 7.2 percent to 3.73 trillion yen ($36.3
billion) in 2013, while operating profit grew 4.1 percent to
337.3 billion yen and net profit gained 2.6 percent to 230.5
The operating profit was below the 353.5 billion yen average
of 23 analyst estimates, according to Thomson Reuters Starmine,
reflecting camera sales that fell sharply, missing Canon's own
"The yen has gone over 100 versus the dollar and 'Abenomics'
is working well," Toshizo Tanaka, Canon's chief financial
officer, said at a news conference. "Although I don't know what
will happen in the mid- to long-term, I don't think the yen will
move too far from the current level for a few years."
Canon's official forecasts for 2014 remain cautious. They
are based on the yen trading at an average of 100 to the dollar,
with an average rate of 135 for the euro. On Wednesday the
dollar was changing hands for 103.34 yen, with the euro at
Its operating profit forecast of 360 billion yen was well
below a consensus estimate of 398.35 billion yen from 23
analysts, according to Thomson Reuters Starmine.
"With the support of the weaker yen managed an
increase in both revenue and operating profit, which is
something to praise," said Kenichi Hirano, market analyst at
Tachibana Securities. "If you take that away, then growth is
certainly dull, but as they assume the yen to be stronger this
year than it is right now, I don't think you can say they are
over-relying on the currency rate."
The scale of Canon's yen boost is significant. The company
said that the impact of the yen's weakening versus the euro and
the dollar effectively accounted for 217.6 billion yen of its
2013 operating profit.
Every yen the Japanese currency weakens in 2014 against the
dollar would add 6.4 billion yen to its operating profit, Canon
That effect has coloured investors' views of Canon. Its
shares are down 8 percent since the start of last year, despite
a nearly 50 percent rise in Japan's benchmark Nikkei average
that was fuelled in large part by the yen's weakness,
highlighting how a soft camera market has offset the company's
benefits from a weak yen and "Abenomics".
Last year saw Canon record the first drop in interchangeable
lens camera sales, to 7.65 million, since it introduced its
digital single-lens reflex model in 2004. Canon doesn't expect a
turnaround this year, forecasting sales of 7.6 million of the
cameras for 2014.
With economic conditions in Europe improving, Canon does
expect better news in its office equipment division this year.
It expects a 5.7 percent increase in sales of products like
printers, following on from 2013's 13.8 percent.
($1 = 102.7900 Japanese yen)
(Reporting by Sophie Knight; Additional reporting by Takashi
Umekawa; Editing by Kenneth Maxwell)