Nikon Corp. dropped the most in 17 months in Tokyo trading after lowering its forecast for annual profit, citing the outlook for weakening global economic growth and a stronger yen.
The Japanese manufacturer of cameras and chipmaking equipment plunged 9 percent, the biggest decline since March 15, 2011, to 2,063 yen as of 9:22 a.m. in Tokyo, after falling as low as 2,001 yen.
“Uncertainties in the economy are increasing, while the yen’s gain will likely add pressure,” on profit, the company said in a statement yesterday in Tokyo, after the market closed.
Nikon and Japan-based camera makers including Canon Inc. face weak demand for point-and-shoot cameras as smartphones with built-in cameras lure buyers. The International Monetary Fund last month lowered its estimate for 2012 global economic growth to 3.5 percent, from its forecast in April for 3.6 percent, saying “financial market and sovereign stress in the euro area and periphery have ratcheted up.”
The Japanese currency has averaged 79.57 yen versus the dollar this year, compared with the 79.71 yen average for 2011 and 103.40 yen in 2008. A stronger currency erodes the value of overseas earnings and makes exporters’ products less competitive overseas.
Net income at Nikon will probably be 60 billion yen ($765 million) in the year ending March 31, compared with a forecast made three months ago for 65 billion yen, the Tokyo-based company said in yesterday’s statement. That compared with the 68 billion yen average of 18 analyst estimates compiled by Bloomberg.
Operating profit, or sales minus the cost of goods sold and administrative expenses, will probably total 85 billion yen this fiscal year, compared with the company’s previous projection of 90 billion yen, Nikon said.
Canon, Nikon’s larger rival in cameras, last month cut its sales and profit forecasts citing weaker growth in the U.S., Europe and China.
Worldwide shipments of cameras fell 1.2 percent to 136 billion yen in June from a year earlier, according to the Camera & Imaging Products Association in Tokyo.
Sales of single-lens-reflex models with interchangeable lenses gained about 24 percent, while compact-camera sales dropped 30 percent during the month, according to the industry group.
Nikon introduced its first mirrorless model in October, joining Sony Corp. and Panasonic Corp. to feature cameras that have interchangeable lenses without the bulk necessary in types that use mirrors.