Canon has published its second-quarter (Q2) financial results, which covers from the beginning April 2020 through the end of June 2020, and, as you would expect in these difficult times, the camera division isn’t looking all that great.

Canon made it clear in its first quarter (Q1) results that things would get worse before they got better; and Q2 numbers are the first concrete evidence of just how much the COVID-19 pandemic has hurt the camera division in an already-declining market.

Across all of its divisions, Canon reported a loss of ¥8.8 billion ($83.3M), marking the first time in its 82 year history the company has been in the red on a quarterly basis. Canon says in its investor presentation that the ‘impact of global economic stagnation [due to the COVID-19 pandemic] was inevitable as we faced rapid drops in actual demand in various businesses and were confronted with limited business activity.’

As for the imaging division, Canon reported net sales of ¥141.7B ($1.35B) and an operating profit of just ¥800M ($7.65M). While seeing any operating profit is good news in this environment, the numbers are still a stark contrast to Q2 2019. Net sales were down 30.8% and operating profit was down 93.9% year-over-year (YoY).

In the Imaging System breakdown, Canon attributes the decline in net sales to there being ‘fewer image capturing opportunities, such as travel and other events.’ due to COVID-19. Canon says it ‘will take time for sales to recover as cameras are considered a luxury item,’ but it’s projecting the entire market to be down 40% to just 5.4M units and its own unit sales down by the same proportion, to 2.5M.

In addition to Canon elaborating on its cameras being used as webcams for video conferencing and communication, Canon also says it plans to ‘enhance’ its concept camera initiative, with new models expected to be out before the end of the year.

Despite the big fall in Q2, Canon is expecting operating profit to only fall 66% for the full year, and sales by value only 20%. This suggests it expects models such as the R5 and R6 to make up for some of the poor Q2 performance. The company says these models and the RF lenses will 'solidify our position in the full-frame camera market.'

Compared to Canon's end-of-2019 projections, which anticipated total sales of ¥787B and an operating profit of ¥53.7 for the 2020 fiscal year, its new Q2 2020 projection for total sales of ¥643.9B and operating profit of ¥16.1B is a drop of 19% and 70%, respectively.

As for how it intends to handle the direction of its camera division post-COVID-19, Canon says it will ‘accelerate measures to streamline operations’ and ‘expand business areas that utilize optical technology.’ Specifically, Canon says it will ‘work to facilitate our aim of switching business domains, leveraging the optical technology we have cultivated so far, and reallocating resources to new fields such as automobiles and industrial-use sensors.’

Although acknowledging that the camera market has declined faster than anticipated (pre-COVID-19), Canon emphasizes that its position – that 'sooner or later the market will settle down and consist solely of users that are particular about imaging'– has not changed.

Summed up, the numbers are down across the board, but they aren’t all that surprising considering the current state of the camera (and global) market. Canon expects to further expand the use of its sensor and optics technology to industrial and automotive use, but still plans to streamline its operations to make the most of its ILC and compact camera products.

You can read all of the financial results by visiting Canon's investor relations webpage.