Canon posts small profits, pres. resigns, stock drops

Despite low profit yield, some are calling the resignation of Canon president 'unexpected'

Canon posted lower-than-expected earnings for 2012 Monday, which prompted the company's president Tsuneji Uchida to resign. Mr. Uchida sat as company president for six years and will step down at the annual shareholder's meeting on March 29. Company officials have stated that it was Mr. Uchida's decision to resign.

Canon stock dropped 1.44 points Monday.

Canon's 76-year-old chief executive and chairman Fujio Mitarai will take over the role of president for the time being. "We are working on training younger leaders, but we couldn't immediately find anyone suitable for the president role," said Canon CFO Toshizo in a news conference, as reported by the Wall Street Journal.

While Canon's profits rose over 14% over Q4, the company yielded only 1% annual profit increase for the second straight year.

Net income was about $3.3 billion, which was below the average projected amount of $4 billion. Analysts have attributed the company's sluggish growth to a strong Yen, and the continued flooding in Thailand. Canon has indicated it will try to offset such hinderances through cutbacks and "increasing automation."

Canon also intends to pick up production of cameras for 2012. The company projects sales of 9.2 million interchangeable lens cameras and 22 million compact cameras in the year to December, compared with 7.2 million and 18.7 million last year, respectively. While the company's operating profit rose 14%, revenue dropped 9.7%.

The announcement that Canon's president would step down was unexpected by some. “While Canon suffered from external obstacles such as the earthquake, floods and the yen’s gain, business results weren’t anything so regrettable," said one Securities Japan Inc. strategist, as reported by Bloomberg.

Canon has indicated that it plans to try and raise its annual revenue 40% to $65 billion by 2015.

[Image Credit: Bloomberg]