Japanese camera maker Canon revealed a much lower than expected profits outlook on Thursday, noting that the third quarter alone was down by 36%. As the company roughly 80% of its revenue overseas, the disruptions and slowdowns in the global economy can easily wreak havoc. Canon most credited its financial shortcomings with the euro crisis and the drop in production and sales in China due to boycotts on Japanese products.
Canon’s net profits for the July-September quarter came to 50.1 billion yen (approx. $627.8 million), a very significant decline from the year before’s 77.86 billion yen. For the 2012 business year ending in December, the manufacturer had originally forecast net profits of 250 billion yen ($3.12 billion), but that has now been reduced to 234 billion yen.
Canon is one of the first Japanese technology companies to post its financial earnings, and is thus seen as a barometer for the rest of country’s corporate results. But in addition to fighting the euro crisis and a worldwide strength of the yen, the popular camera maker is facing stronger competition every year from smartphones by Apple and Samsung with their more convenient, just as powerful built-in cameras. As tensions between China and Japan remain high over their territorial dispute, so does an anti-Japanese sentiment among Chinese buyers, meaning less and less products, not just cameras, being sold there.