Canon Inc, the company whose engines are behind the phenomenal success of Hewlett-Packard Co in the laser printer market, turned in record annual profits for 1996 yesterday, and gave thanks for the still strong global boom in personal computers, and the weaker yen. Canon said parent current profits jumped 56% to the equivalent of $1bn in 1996, surpassing its previous record of $647m in 1995. Current profit in Japanese parlance is before tax and includes losses or gains on investments. Sales rose 13 percent to $11.2bn, thanks largely to a 23% rise in sales of computer peripherals, including those legendary printers, and sales of peripherals in 1996 accounted for more than half of total sales last year for the first time ever – at one time, the company was known only for its cameras. Sales of computer peripherals, such as printers, were the driving force for the company’s whole business last year: we’d like to attain the fourth successive year of growth in both profits and revenues this year, Canon director Tokuzo Tanaka told a news conference in Tokyo. New models of the company’s bubble-jet printers stimulated demand for printers for use in the home, and weaker yen was also particularly important for Canon’s earnings last year, since exports account for about 80% of revenues – very much more than for companies such as NEC Corp and Hitachi Ltd, which export less than half of their output. Our export environment has improved on the yen’s weaker trend from the previous year, the company said. Canon officials have said that the weaker yen has increased its export income by $483m in 1996 by increasing sales and revenues from exports. The shares ended up 60 yen at 2,630 yen on Wednesday – and the market as a whole may still be nursing the mother of all hangovers from the bubble economy of the late 1980s, but you could still have found strong performers even in that market because Canon’s previous alltime-high was 2,650 yen achieved only on January 29. For the current year, Canon expects parent current profit to grow 9.4% to $1.1bn. The company is budgeting for the dollar to trade at an average rate of 115 yen in 1997, which is well below the current level of 124 yen. Canon had forecast an average rate of 108 yen to the dollar for 1996. Canon expects capital investment to be $927m for the year to December 31, up from $850m at current exchange rates in 1996. Research and development spending for the current year is budgeted to come to $1.45bn, compared with $1.35bn of last year.
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