Canon Inc. said Wednesday it now expects its group net profit in 2019 to dive 20.9 percent from a year earlier to ¥200 billion ($1.79 billion), lowering its outlook due to weak sales of camera products amid an economic slowdown in China.
The company had earlier projected ¥240 billion in net profit for the year. It also cut its consolidated operating profit to ¥274 billion from ¥325 billion, on sales of ¥3.85 trillion against an earlier forecast of ¥3.9 trillion.
Canon said the digital camera market continues to shrink, while touching on growing concern over the outlook for the global economy stemming from trade stagnation.
The camera and office equipment maker said it revised down its global sales plan for interchangeable-lens digital cameras to 4.2 million units from a previously projected 4.7 million.
"We feel personal consumption in China has declined," said Executive Vice President Toshizo Tanaka in a news conference, adding that demand for high-end models in the Chinese market has been slowing.
"There was an enormous negative impact in the first quarter through March," Tanaka told reporters.
Camera manufacturers are suffering a market contraction as improved photo functions on smartphones eat into demand for entry-level digital cameras, and even for some single-lens reflex cameras.
Canon said it will launch new products in the digital camera market in a bid to recover sales. Tanaka said sales and profits are expected to pick up in the second half.
In the January to March period, Canon said its group net profit plunged 45.2 percent from a year earlier to ¥31.3 billion, with group sales down 10.0 percent at ¥864.47 billion.