Quick Facts:
- Earnings per share were down 126.67% over the past year to ($0.08)
- Revenue of $6,234,000,000 declined by 25.68% year over year, which missed the estimate of $6,780,000,000.
- Canon’s 52-week stock value high was at $28.41
- Canon’s 52-week stock value low was at $18.69
- Canon’s headquarters and 28 of its 46 manufacturing plants are in Japan, but nearly 80% of revenue is delivered from international markets. The firm has been expanding into new geographies and markets to mitigate this exposure.
Canon reported its second-quarter 2020 (Q2, 2020) results on July 28, 2020.
According to the company, the global economy suffered its worst decline since the Great Depression as a result of COVID-19 and is the reason for Canon’s poor results.
Toshiko Tanaka, Canon’s executive vice-president and chief financial officer, said, “We sank into the red for the first time on a quarterly basis.”
Its net sales declined 25.7% to 673.3 billion yen (US$6.41 billion) and its operating profit and net income were a negative 17.8 billion yen (US$169.46 million) and 8.8 billion yen (US$83.80 million), respectively.
Canon claims it remained in the black, securing an operating profit of 15.1 billion yen (US$143.80 million) on a half-year basis, despite the COVID-19 pandemic.
Looking at business units:
- Office Business unit net sales declined 30% and operating profit was in the red as both hardware sales and service revenue decreased;
- the Imaging System Business Unit managed to secure a profit by steadily capturing demand for home printing through inkjet printers;
- Business unit net sales declined and operating profit was in the red.
The company pointed out that COVID-19 impacted all of its businesses. Gross profit declined 116.2 billion yen due to factors such as decreases in sales volume and lower plant capacity utilization rates.
Speaking of outlook on the future, Canon expects net sales to decline 14.3% to 3.08 billion yen, operating profit to decline 74.2% to 45.0 billion yen, and net income to decline 65.6% to 43.0 billion yen. In its statement, Canon said, “As for COVID-19, while we expect the impact on our performance to decrease in the second half, we still estimate a full-year impact of around 480.0 billion yen on net sales and around 170.0 billion yen on operating profit.”