Japan Prime Minister Shinzo Abe
OEM increases profit estimate by $300 million (€230 million) as weakening yen boosts overseas earnings.Reuters reports that Canon is expecting its full-year operating profit forecast for 2013 to reach ¥450 billion ($4.5 billion/€3.4 billion) compared to its previous estimate of ¥410 billion ($4.1 billion/€3.1 billion); although it remains lower than analyst forecasts of ¥473 billion ($4.7 billion/€3.6 billion).
Despite first quarter operating profit falling 34 percent to $552 million (€423.5 million) due to consumers favouring smartphones over compact cameras, “a weakening yen triggered by Japan’s latest deflation-fighting policies” has led to an inflation of overseas earnings for the Japanese company, with foreign markets making up four-fifths of its overall sales.
Japan Prime Minister Shinzo Abe’s introduction of his Abenomics economic policy in November has reportedly benefitted Japanese firms like Canon, with the weakening of the yen bringing in more exports to the companies. Toshizo Tanaka, Chief Financial Officer of Canon, commented: “We welcome Abenomics […] the Japanese economy moves on this kind of mood so we value this and hope to find success.”
Canon’s shares have reportedly gained 58 percent since mid-November when an Abenomics stock rally began, with stock in Tokyo rising 1.3 percent to ¥3,840 ($38.72/€29.71).