Canon’s second quarter net income increased by 10.8% year-on-year to ¥65.4 billion ($A700 million), as net sales increased by 2.2% to ¥1,020.9 billion ($A10.8bn). Printing Business Unit sales were up by 0.8% compared with the same period of the previous year.
Canon's Colorado M with white ink
“Looking back at the second quarter of 2023, although economic recovery showed signs of weakness in some regions, there was a moderate recovery overall,” Canon said.
“By region, in the United States, thanks to the strong employment situation, consumer spending remained steady. In Europe, however, the economy remained stagnant due to the downward pressure caused by rising interest rates. In China, despite domestic demand recovering thanks to the lifting of the government’s Zero-COVID strategy, the demand in real estate markets decreased. In other emerging countries, the economy remained solid, mostly centering around consumer spending and the service industry. In Japan, the economy recovered moderately driven by its solid export, the recovery of consumer spending and capital investments.
“As for the second quarter, net sales for the second quarter increased by 2.2% year-on-year to ¥1,020.9 billion due to solid demand and new products that were well-received in the market, as well as the favourable effects of depreciation of the yen. Net sales for the first half of the year increased by 6.1% year-on-year to ¥1,992.0 billion. Gross profit as a percentage of net sales increased by 1.0 points year-on-year to 47.5% due to well-received adjustments to product prices, improvement of product costs, resulting from easing of component shortages and logistics disruptions, and depreciation of the yen.
“Gross profit for the second quarter increased by 4.5% year- on-year to ¥484.8 billion. Operating expenses increased by 7.4% year-on-year to ¥392.5 billion due to an increase in sales personnel and sales-related expenses accompanying a growth in sales. In addition, operating expenses denominated in foreign currencies increased due to the depreciation of the yen.
“As a result, operating profit decreased by 6.3% year-on-year to ¥92.3 billion. On the other hand, operating profit for the first half of the year increased by 1.2% year-on-year to ¥176.7 billion. Other income (deductions) increased by ¥22.1 billion year-on-year to ¥8.9 billion, due to gains on valuation of securities and a decrease of currency exchange losses from liabilities denominated in foreign currencies. As a result, income before income taxes increased by 18.7% year-on-year to ¥101.1 billion and net income attributable to Canon Inc. increased by 10.8% year-on-year to ¥65.4 billion. Income before income taxes for the first half of the year increased by 23.4% to ¥188.7 billion and first- half net income attributable to Canon Inc. increased by 16.0% to ¥121.8 billion."
Results by Segment:
Looking at Canon’s second-quarter performance by business unit, in the Printing Business Unit, MFDs for offices continued to sell well, significantly exceeding unit sales of the same period from the previous year, as the product supply shortage was abated, while demand for products including the imageRUNNER ADVANCE DX C5800 mid-speed colour MFD series were solid.
As for inkjet printers, the number of unit sales decreased compared with the same period of the previous year as the surge in demand from users working from home subsided. As for laser printers, the number of unit sales decreased compared with the same period of the previous year, when supplies of products recovered, partly due to the curbing of corporate investments. 
Regarding equipment for the production printing market, the number of unit sales increased compared with the same period of the previous year, with the new strengthened product line-up of imagePRESS V series models strengthened by the addition of the imagePRESS V1350. As a result, sales of the Printing Business Unit increased by 0.8% compared with the same period of previous year to ¥574.9 billion. Due to such effects as weak consumables sales, net income before tax for the second quarter decreased by 13.0% compared with the same period of the previous year to ¥61.6 billion. Sales for the combined first six months of the year totaled ¥1,133.1 billion, a year-on-year increase of 5.1%, while income before income taxes totaled ¥114.7 billion, a year-on-year decrease of 9.1%.
Outlook
There are still some global economic uncertainties for the third quarter onward due to various geopolitical risks and the risk of an economic slowdown as a result of tightening monetary policies in response to inflation. However, the outlook for the global economy anticipates a continued recovery trend due to the normalization of markets after the lifting of movement restrictions following the COVID-19 pandemic.
Canon revised its forecast upward to full-year consolidated net sales of ¥4,363.0 billion, a year-on-year increase of 8.2%; operating profit of ¥400.0 billion, a year-on-year increase of 13.2%; income before income taxes of ¥425.0 billion, a year-on- year increase of 20.6%; and net income attributable to Canon Inc. of ¥292.0 billion, a year-on-year increase of 19.7%.
