Olympus Corp., the camera and endoscope maker that admitted an accounting fraud, cut its operating profit forecast by 24 percent on an expected loss at its camera unit.
Operating profit, sales minus cost of goods sold and administrative expenses, will probably be 38 billion yen ($478 million) in the year ending March, down from the August estimate of 50 billion yen, Olympus said in a statement today.
The digital camera unit is expected to report a loss of 8 billion yen in the current fiscal year, compared with its previous forecast of a 1 billion yen profit, as the compact camera market is shrinking, the Tokyo-based company said today. Olympus and Sony Corp. announced on Sept. 28 they would cooperate on cameras and medical products.
“The compact camera market is shrinking rapidly because people are switching to smartphones and the economic situation in Europe became worse,” Chief Executive Officer Hiroyuki Sasa said in a briefing in Tokyo today.
Olympus cut its full-year sales forecast for digital cameras by 11 percent to 7.3 million units, Nobuyuki Onishi, head of accounting, said at the same event. The reduction follows Canon Inc., the world’s largest camera maker, as it also cut its full-year profit and sales forecasts last month on consumers’ increasing use of smartphones such as Apple Inc.’s iPhone to take pictures.
Canon lowered its sales forecast for Powershot, Ixus and other compact models by 9.5 percent to 19 million units, and for professional-grade EOS models by 4.3 percent to 8.8 million.
Olympus said annual net income will probably rise 14 percent from the previous forecast to 8 billion yen because of an asset sale. Profit for the fiscal half ended September was 8 billion yen, compared with a loss of 32.3 billion yen a year earlier.
Olympus fell 1.7 percent to 1,244 yen at the close of trading in Tokyo, before the earnings announcement.
The stock has more than doubled in the past year following a plunge of as much as 81 percent after Olympus’s board in October 2011 fired President Michael Woodford, who had questioned fees paid by the company for takeovers.
Sony said it would invest 50 billion yen in Olympus, which admitted to a 13-year accounting fraud after the Woodford firing, to shore up its capital ratio as it recovers from the scandal that led to restated earnings and the replacement of directors.Copyright © 2013 Paddock Publications, Inc. All rights reserved.