, TOKYO, Apr 26 – Japanese high-tech giant Canon said Tuesday its business outlook was "extremely uncertain" as it announced profits fell in the first quarter after last month\’s earthquake and tsunami hit production.
January-March net profit slipped 2.4 percent from a year earlier to 55.5 million yen ($680 million) while operating profit declined 5.0 percent to 82.5 billion yen.
Sales rose 11.1 percent to 839.2 billion yen on healthy demand for printers and digital cameras.
But the strong yen hurt earnings, Canon said. The strength of the Japanese currency has put many exporters at a disadvantage by making their products more expensive overseas and eroding their repatriated earnings.
The March 11 quake and tsunami disaster also damaged inventory assets and caused a shortage of parts, forcing Canon to halt factory lines.
It slashed its earnings forecast for the full year to December, bracing for drops in both sales and profit instead of the growth it had projected earlier.
It expects a net profit of 220 billion yen instead of the previously estimated 310 billion yen. The new forecast represents a 10.8 percent decline from the previous year\’s result.
The company cut its operating profit forecast to 335 billion yen from 470 billion yen and revenue estimate to 3.73 trillion yen from 4.10 trillion yen.
"Besides direct damage to buildings and inventory assets from the Great East Japan Earthquake, we have seen indirect impacts such as a power supply cut, parts shortage and lower personal consumption in Japan," Canon said.
The company said its business outlook was "extremely uncertain," noting that its earnings can be seriously affected by parts and electricity supplies.
"The latest consolidated earnings forecasts can fluctuate" heavily depending on future developments, it warned.
The tsunami damaged a major nuclear power plant, causing fears of a shortfall in electricity supply as summer approaches.