Canon Profit and the camera industry

Started 2 months ago | Discussions thread
OP ByronP Contributing Member • Posts: 866
Re: Actually worse than Nikkei estimate

nnowak wrote:

ByronP wrote:

nnowak wrote:

Canon released their half year report on the 24th, so we can speak to the real numbers instead of the Nikkei estimate. Overall, Canon profits are dropping by 37%, but Imaging division profits are dropping by 50% compared to 2018. Imaging division profits for 2018 were down 33% compared to 2017.

In two years, the number of cameras sold is dropping by 29% on both a unit basis and value basis, but Imaging Division profits are dropping a total of 64%. Basically, the number of cameras Canon are selling is dropping, but profits on those sales are dropping far, far faster.

The Nikkei article pointed to a decline in sales of office devices in Europe for the declining profits, but profits for the Office division are down only 12.9%.

I suspect that whatever new cameras Canon will announce will use this new technology to try to stay up with Sony in the mirrorless segment. But, I would not get too excited by the new sensors as they were planned way before Canon or anyone else knew about the fall off of a cliff of camera sales in general and Canon's specifically. Canon management as well as Nikon's and Sony's, et al at their respective image division and higher are all trying to figure out how to reduce expenses including R&D so cash flow better matches their expectations. I would not be surprised to see more consolidation in this industry, less investment (R&D) and in general a tightening of expenses

Up through the first half of this year, Canon's R&D investments for the Imaging division have remained fairly stable for several years (2011-2019). The difference between the highest and lowest yearly investment is less than 8%. Canon may decrease R&D spending for the second half of the year, but for now spending looks steady. Even headcount is remaining steady with less than 5% total variation for the same time period.

We will see.  Up to now the industry and their sales and profit did not tank....Bod's, top management can not ignore what is happening in the industry and in their own company and keep their jobs.  I would not buy camera company stocks at this moment in time.....bp

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