# Canon Cuts Profit Forecast as Post-Brexit Yen Strength Bites



## Canon Rumors Guy (Jul 26, 2016)

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Canon Inc (<span id="symbol_7751.T_0"><a href="http://www.reuters.com/finance/stocks/overview?symbol=7751.T">7751.T</a></span>) cut its full-year profit forecast on Tuesday, becoming Japan’s first major technology company to report a weaker outlook on the yen’s surge following Britain’s vote to leave the European Union.</p>
<p>The world’s biggest maker of cameras and printers forecast group operating profit of 265 billion yen ($2.54 billion) for the year through December, from 300 billion yen estimated three months prior.</p>
<p>The new forecast, Canon’s second downward outlook revision this year, is below market expectations of 297 billion yen, based on estimates of 17 analysts surveyed by Thomson Reuters.</p>
<p><em><a href="http://www.reuters.com/article/us-canon-results-idUSKCN1060JB?type=companyNews">Read more at Reuters</a></em></p>
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## xps (Jul 26, 2016)

Then the rumored 20% price increase from another rumor site will come true (in Europe)


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## arthurbikemad (Jul 26, 2016)

And if it does I for one will hold my next spend until the market settles, lucky for me the gear I have now "does the job just fine" if Canon wants my 1DX2 and 5D4 money they had better hold off with any price hike! Upgrades for me from my 1DX and 5D3 are GAS oriented, my investment in glass means my photography needs are well covered for the foreseeable future. Canon would be wise to hold ground on any price increase and play it cool with the exchange rate. The media stirred up so much fuss re brexit no one knows whats what so early on, also I note that Canon has no idea what percentage of sales is UK to Europe, not very useful when your looking at the UK's sales figures/brexit results.


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## Kristofgss (Jul 26, 2016)

At this rate, Canon lenses are starting to become a good investment.

Though, if the pound is weaker, would it then not be better to buy Canon lenses in the UK if you are from another European country to compensate for the price hike?


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## xps (Jul 26, 2016)

Kristofgss said:


> At this rate, Canon lenses are starting to become a good investment.
> 
> Though, if the pound is weaker, would it then not be better to buy Canon lenses in the UK if you are from another European country to compensate for the price hike?



The problem is, that most of the cheaper shops do no shipping to continental Europe. I wrot to al lot of them, but they refused to ship cheaper gear to Germany. And if the do so, there is seldom an advantage in the costs.
I was lucky to get my tripod/fluid gear combo chepaer there, but with other gear I had no luck


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## fentiger (Jul 26, 2016)

I would suspect when the new 5D4 is released in the UK the price would reflect the sterling depreciation


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## scrup (Jul 26, 2016)

Canon can hold of any releases to milk more profit from existing technology or increase prices on the launch of new products.


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## wockawocka (Jul 26, 2016)

Speaking from the heart, I do feel as though Canon kit has been 20% more expensive relative to the European market for years even factoring in sales tax, hence the strong grey import trade.

If the 5D4 comes out about £3000 GBP then it would have to be something pretty special to make me put down my 5DSr's.


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## GuyF (Jul 26, 2016)

Looks like the rises have maybe started - until very recently the 70-200 2.8 IS was £1499 in most shops, now appears to be £1599 in many places. Glad I got mine when I did - paid just £1164 after factoring in a 10% off one day special at Calumet and getting £185 cashback from Canon as I bought it with a 1DX2. Result!


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## sleepnever (Jul 26, 2016)

Guess they better rock it with the 5D4 then...


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## rfdesigner (Jul 26, 2016)

I don't doubt it in the slightest. The city assumed we'd stay in, then totally panicked when we voted to leave.. so it's all uncertainty driving the currancy markets, and some of the panic has been unwound already. Things will work out in the medium and long term and in the mean time the UK trade deficit is getting fixed.. hurrah!

So Hdew is now asking £120 more for a 6D than they were when I bought back in Feb, glad I bought then but it means my next flash gun will cost more so I'm sure it will be denting sales.


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## Ozarker (Jul 26, 2016)

Just a burp. The tide rises and falls.


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## rrcphoto (Jul 27, 2016)

interesting quote from the canon summary report.

_Within this market, our new DSLRs, such as one for advanced amateurs that offers improvement in tracking fast moving subjects, and an entry-level model that is network-enabled, have contributed to our sales. For mirrorless cameras, we have expanded unit sales, particularly in Asia, running advertising campaigns targeting young people and females. As a result, we sold 1.5 million interchangeable lens cameras in the second quarter, representing sales that were in line with last year, which was also the case in the previous quarter. 

As for compact cameras, the market and our sales, which were 1.16 million units in the quarter, continued to shrink at a rate of about 30%. Under these conditions, we have been working to broaden our lineup of premium models and with the positive effects of this year's new product, we were able to achieve 50% growth in this category. This result has contributed to not only overall market share gain, but an improvement in overall compact camera profitability.

As for impact from the Kumamoto earthquake, it is already having a negative effect on our procurement and is expected to have a negative impact on compact camera sales in the second half.

As for interchangeable lens cameras, we exceeded our sales plan for new DSLRs and our enhanced lineup of mirrorless cameras, particularly in Europe and China. As such, we raised our full-year unit sales projection to 5.5 million units, which is in line with last year._

the key point is that the ILC market overall is still declining about 5-10% YoY - and canon has stabilized it's sales unit volume, which means that canon continues to grow it's marketshare.

so much for "stupid canon" ..


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## rrcphoto (Jul 27, 2016)

also what was curious is that SOMEONE was all of a sudden shipping a crapton of mirrorless into Asia (not including Japan) and this is the first indicator from anyone about it.

Seems canon shipped one hell of a lot of M's into Asia and they are doing just fine.

then again.. canon's .. stupid with mirrorless


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## unfocused (Jul 27, 2016)

rrcphoto said:


> interesting quote from the canon summary report...
> 
> so much for "stupid canon" ..



Thanks. I appreciate it whenever someone takes the time and trouble to go to the original source. Much more informative.


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## Maiaibing (Jul 27, 2016)

rrcphoto said:


> interesting quote from the canon summary report.
> 
> _As for interchangeable lens cameras, we exceeded our sales plan for new DSLRs and our enhanced lineup of mirrorless cameras, particularly in Europe and China. As such, we raised our full-year unit sales projection to 5.5 million units, which is in line with last year._
> 
> the key point is that the ILC market overall is still declining about 5-10% YoY - and canon has stabilized it's sales unit volume, which means that canon continues to grow it's marketshare.



Good news for Canon to raise its DSLR sales expectations for the first time in years. Wonder how much this was due to 5DS/R-sales. Canon has already before said they were selling better than expected. Given the price drop for the 5DS I guess (??) its the 5DSR model that has been doing well. However, as always we have very little specific info to go by.

(Will go through the full set of investor release later this week.)


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## moushu (Jul 27, 2016)

Am I alone in not seeing why this profit forecast is being linked to Brexit?
After all, there's no data on the %age of Europe sales are in UK.
So while sales in UK might drop due to £, what is the reason for suspecting a drop in sales in the rest of Europe?
I'm sure there are reasons, but in my early-morning bleary-eyed state, I'm probably being a bit slow here


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## Maiaibing (Jul 27, 2016)

moushu said:


> Am I alone in not seeing why this profit forecast is being linked to Brexit?
> After all, there's no data on the %age of Europe sales are in UK.
> So while sales in UK might drop due to £, what is the reason for suspecting a drop in sales in the rest of Europe?
> I'm sure there are reasons, but in my early-morning bleary-eyed state, I'm probably being a bit slow here



Economic growth is expected to take a hit due to Brexit. Worst for the UK which is currently projected to have a negative economic growth over the next 12 months of around -1% GDP - this will of course also spill over into other economies (mostly affecting other EU countries). Cameras are a luxury good and feel the sting of such swings more. As Canon's latest report shows they were currently having a good sales run in Europe for their most high margin cameras (DSLR's) so they are worried this may stop.


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## serenaur (Jul 27, 2016)

GuyF said:


> Looks like the rises have maybe started - until very recently the 70-200 2.8 IS was £1499 in most shops, now appears to be £1599 in many places. Glad I got mine when I did - paid just £1164 after factoring in a 10% off one day special at Calumet and getting £185 cashback from Canon as I bought it with a 1DX2. Result!



This would seem to be the case 

I've been tracking the price of the 70-200 f2.8L IS II for around 3 months now as I was about to buy one (preferably around the same time as the 5D4), but in Germany the prices rose by €200 about 3 weeks ago and around £100(ish) in the UK. Now I will wait until sometime around Christmas when there are the usual sales as well as seeing what happens with the 5D4 which I am also seriously considering (depending on what it's packing!). I'm suddenly very nervous about putting €5k into camera gear this year though with the fear that I'll buy something then the price will drop dramatically or some great cashback deal will come along.


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## jeffa4444 (Jul 27, 2016)

No one knows the long term implications of Brexit and its speculators that are discounting £ and hitting stocks. One of the largest house builders announced results today and they were unaffected post Brexit with their forward order book (however the market had wiped 15% of their share value before this). We exporting 80% of our goods unchanged from before Brexit with healthy forward orders. I don't think it will be as bad as speculators have forecast and the £ will rise once this is confirmed. Canon were already doing promotion after promotion pre Brexit and they will no doubt continue to do so.


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## rrcphoto (Jul 27, 2016)

moushu said:


> Am I alone in not seeing why this profit forecast is being linked to Brexit?
> After all, there's no data on the %age of Europe sales are in UK.
> So while sales in UK might drop due to £, what is the reason for suspecting a drop in sales in the rest of Europe?
> I'm sure there are reasons, but in my early-morning bleary-eyed state, I'm probably being a bit slow here



because the Yen is rising against the uk pound and euro, stronger Yen, weaker export sales.

the Yen is considered a safe haven currency, so any time there's unrest or uncertainty it usually increases in value.


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## rrcphoto (Jul 27, 2016)

Maiaibing said:


> rrcphoto said:
> 
> 
> > interesting quote from the canon summary report.
> ...



I think the M10 and M3 did alot of it in Asia. I haven't seen any 5Ds anywhere on the top of sales charts.

there was a pretty dramatic spike in shipments of mirrorless that started around the time that the M10 was released, and there was really no other MILC released around the same timeframe (oct-nov).

and very few camera manufacturers have the manufacturing and logistics capability of a canon or nikon.


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## grainier (Jul 27, 2016)

Can you say "price hike" with me? C'mon, all together now!


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## GuyF (Jul 27, 2016)

serenaur said:


> Now I will wait until sometime around Christmas...



Well, at least you have that to look forward to!


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## serenaur (Jul 29, 2016)

GuyF said:


> serenaur said:
> 
> 
> > Now I will wait until sometime around Christmas...
> ...



It'll be a better gift than socks and a new pair of slippers! ;D


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