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Canon's 2021 Q1 financials show positive results
It's difficult to find much in the way of negative news in Canon's financials this quarter. As the world continues its recovery from the COVID-19 pandemic, Canon has seen sales growth throughout every segment.
Canon curiously decided to restructure its divisions. The big changes were that no longer does imaging contain inkjet printers. Imaging now contains only cameras that we care about and network cameras. To be honest, the way they changed it makes a lot of sense.
As far as Canon's new outlook, the imaging segment Canon is very bullish and projecting a 441% operating profit increase as they feel sales (which are projected to increase by 14%) will continue to increase following the pandemic
For Imaging, because the size of the camera market is already approaching the number of users that are particular about visual expression, we expect the market to be limited to moderate contraction going forward. As current sales of mainly new products are exceeding our plan, we raised our full-year projection for both sales and profit.
In the first quarter of 2021, the cameras piece of the imaging segment had a 31.4% sales growth and 7% increase in units sold. Canon is projecting 11% and 5% respectively for the entire 2021.
Canon places the credit of this as far as the sales of both R5 and R6, which were continually sold out for ages.
In the first quarter, revenue was significantly higher than last year, as sales remained strong, driven by the EOS R5 and EOS R6 which were launched in the second half of last year. Additionally, the synergy effect of having competitive camera bodies and expanding our lineup of RF lens, which command high margins, led to an increase in average selling prices. This, and the establishment of efficient online sales activities nurtured through COVID-19 is leading to an improvement in profitability. For the full year, reflecting the situation surrounding sales in the first quarter, we not only raised our projection for camera unit sales by 100 thousand to 2.9 million, but also raised our projection for revenue.
One thing in this summary that nags me a bit is the comment that RF lenses command a high margin. Is that good for us? Well, if you are a shareholder, it's good news - but it also means that we the consumers are paying perhaps more than we should for some of those shiny new RF lenses.
One interesting tidbit is that Canon is now projecting the entire market to be around 5.8m units, and Canon's share of that will be a very optimistic 50%. While Canon has come close to that 50% market share in the past, this speaks to Canon's confidence in their EOS RF lineup, and what's happening this year. In other words, the Sony A1 isn't bothering them that much. Arrogance? Perhaps. Time will tell.
All in all quite positive news from Canon, it will be interesting to see the other companies and how their financials are this quarter.
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