Canon First-Quarter Profit Up 22%; Company Lifts Outlook

Japan's Canon posted a 22% rise in quarterly operating profit on Tuesday on strong demand for copiers, laser printers and digital cameras, and lifted its full-year forecast by 3%.

Canon earnings have been propelled higher by growing sales of digital cameras, colour office copiers and laser printers, including those supplied to Hewlett-Packard . It has also benefitted form a weaker-than-expected yen.

Canon is the first to report earnings among Japan's top camera and office equipment makers, which on average are expected to post strong earnings for the past business year but see slower growth this year as digital camera demand softens and due to the absence of big currency gains.

The company, the world's top maker of digital cameras and laser printers, said its group operating profit came to 207.4 billion yen ($1.75 billion) in the January-March quarter, up from 170.14 billion yen in the same three months last year.

The result beat Canon's own forecast of 185 billion yen but was roughly in line with the Nikkei business daily's prediction of about 210 billion yen in an article last week. Merrill Lynch had forecast a profit of 189.9 billion yen.

Canon raised its operating profit forecast for the year to December to 790 billion yen from 765 billion yen.

Canon's upbeat report echoed earnings last week from U.S.-based office equipment rival Xerox Corp., which said quarterly profit rose 17 percent on healthy sales of printing supplies and high-margin colour machines.

Prior to the earnings announcement, shares of Canon ended up 1.5 percent at 6,660 yen. Tokyo's electrical machinery index IELEC.rose 0.2%.

Shares of Canon fell 5.5% in the January-March quarter, underperforming a 1% fall in the electrical machinery index.