Net income will drop 68 percent to 98 billion yen ($1.1 billion) in 2009, Tokyo-based Canon said today. Thats less than the 160 billion yen median of nine analyst estimates compiled by Bloomberg this month.

Canon said it may post a loss this quarter and projected its full-year camera sales will fall as the global economy deteriorates. The company joins Sony Corp. and Panasonic Corp., the worlds largest consumer-electronics makers, in projecting worsening results for this fiscal year as recessions in Europe, Japan and the U.S. damp demand and the yens surge erodes overseas earnings.

“We are expecting an even more severe business environment this year than in 2008,” Masahiro Osawa, a senior managing director in charge of Canons accounting, told reporters in Tokyo.

Sales are expected to decline 15 percent to 3.5 trillion yen in 2009. Operating profit, or revenue minus the cost of goods sold and administrative expenses, will fall 68 percent to 160 billion yen this year, Canon said.

The company was projected to have 2009 sales of 3.5 trillion yen and operating profit of 240 billion yen, according to the analyst estimates compiled by Bloomberg.

Canon rose 0.4 percent to close at 2,590 yen on the Tokyo Stock Exchange, before earnings were reported. The stock fell 47 percent last year.

Yen Surges

The yen jumped 24 percent against the dollar and 30 percent versus the euro in 2008, making it the best performer among 16 major currencies tracked by Bloomberg and undermining the value of overseas earnings when repatriated.

The company, which generates about 80 percent of annual sales outside Japan, forecast the dollar will average 90 yen and euro 120 yen this year. That compares with a level of 103.23 yen and 151.46 yen, respectively, for 2008, it said.

Canon said its camera-unit sales will probably fall 7 percent to 23.9 million this year, while revenue at the business may drop 18 percent to 858.4 billion yen.

Global shipments of the product will fall 0.7 percent this year to 119 million units, the Tokyo-based Camera & Imaging Products Association said yesterday. Thats the first decline since the group began tracking the shipments in 2003.

Osaka-based Panasonic on Nov. 27 lowered its net income projection for this fiscal year by 90 percent to 30 billion yen as the global recession hurt demand and prices fell.

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