Nikon Q1 down on firmer yen, slow chip gear demand

TOKYO, Aug 6 (Reuters) - Japanese precision equipment maker Nikon Corp (7731.T) said on Wednesday its quarterly profit fell 20.5 percent, dragged down by a strong yen and sluggish demand for chip-making equipment, and it kept its annual outlook below market consensus.

Nikon, the world's No.5 digital camera maker, posted an operating profit of 28.72 billion yen ($265.1 million) for April-June, down from 36.13 billion yen in the same period last year.

For the year started in April, Nikon kept its outlook for a 3.8 percent fall in operating profit to 130 billion yen while 18 analysts polled by Reuters Estimates predict on average 138 billion yen.

Nikon, which launched its new D700 digital single lens reflex camera last month, is fighting for share against rival Canon Inc (7751.T) even as fears of a global economic slowdown threaten to dampen consumer appetite for pricey cameras.

Nikon is also the world's No.2 maker of chip steppers, and faces tough competition from Netherlands-based ASML (ASML.O), which is making inroads in the Japan market for the complex machines used to print circuitry on silicon wafers.

Shares of Nikon have gained 10 percent since the start of the business year in April to Tuesday, compared with rival Canon's 5.7 percent rise and a 3.4 percent rise in the Tokyo stock market's electrical machinery subindex .IELEC.T. (Reporting by Mayumi Negishi)