Canon 3Q 2019 Financial Results. Poor results - but encouraging details

Canon released their third-quarter details, and this is certainly a quarter where if you just look at the numbers, it looks like Canon's camera business is struggling, however, it's the details and what Canon says about what is happening coming up that gives some optimism that Canon has navigated a really rough year with results to switching from the EF mount to the RF mount.

First, the numbers, as you can see from the above chart, Canon is down a shocking 22% in sales for 2019 actual as compared to 2018, with this quarter being down 16% alone.  That's going to get alot of talk over the next few days I'm sure.

Canon blames the contraction of the market, partly due to the erosion of the DSLR entry level market.  Canon also states that price competition is rising between the various manufacturers as Sony, Nikon, Canon and Pansonic compete directly against each other in the highly competitive full frame mirrorless market.

In the third quarter, our sales of interchangeable-lens cameras decreased 7% to 980 thousand units due to the impact of market contraction, mainly for entry-level DSLRs.

Amid market contraction, price competition surrounding higher-end full-frame models intensified due to the energy that each manufacturer is putting into this segment. In this kind of environment, and due to our stance to prioritize profitability, we posted third-quarter unit sales of higher-end models that were below our plan.

However all is not that bad, Canon is not lowering their year projection of sales on Cameras, partly due to the fact that it seems like the EOS-M which is still #1 in Japan, is now #1 outside of Japan, and with positive feedback for both the M6 Mark II and the 90D.

we did expand sales, mainly for a popularly priced mirrorless camera that has secured the number one market share position, both in and outside of Japan. Furthermore, thanks to positive feedback we have also received for new mid-range cameras, we decided to maintain our full-year unit sales projection.

We can also glean that it sounds like EOS RF users are buying RF lenses.  Even if some pundits feel that "Canon has no cameras that match the lenses".  Interestingly, sales of the 24-240mm kit lens are also going strong;

As for the full-frame mirrorless camera that we introduced last year, up to and including the third quarter, we have broadened our lineup of dedicated lenses by four in 2019. As a result, we have seen a steady rise in our lens-attach ratio.

we are seeing strong orders, particularly in North America, for the kit that includes a high-magnification zoom lens which covers a wide-range of image capturing situations from wide-angle to telephoto.

Canon is also working at delivering better products, as we have seen with the continual updates to the EOS-R and EOS-RP via firmware since their announcements.  It seems this will continue for Canon as well.  They will also focus more on marketing and social media.

we are raising the appeal of our products, continuously making improvements to software which has a significant impact on performance, such as making available firmware upgrades that further improves the accuracy of autofocus. On top of these measures, we will work to encourage potential customers to purchase our products with a focus on digital marketing, through such activities as partnering with professional photographers using social media, and distributing videos that highlight the strengths of our optical technology.

As for compact cameras, Canon feels that the new G series compacts are going strong, and they will not adjust the year forecast for sales for compacts.

As for compact cameras, we kept our previous full-year unit sales projection as our results have been in line with expectations. Even in the shrinking market, we exceeded the third quarter unit sales of last year of premium G series models that offer advanced video features, bringing new young people into our ecosystem. We will continue efforts to expand sales of our G series, which has relatively higher margins, and link this to improved profitability.

• Canon Financials