Jul 27, 2015 09:22 AM EDT

Canon Q2 Sales Down Due To Smartphones, Offsets Weak Camera Growth Through New Investments

Canon reported a fall in their net profit, Monday. Compared to 81 billion yen of last year, its sales went down to 68 billion yen or $552 million based on Thomson Reuters data.

Income before the taxes for this quarter went down to 11.7% to 103.24 billion yen or $ 846.19 million, as per Nasdaq's report.

Canon is now expecting a 245 billion yen full-year profit instead of 255 billion yen, which was forecasted by analysts three months ago. Its shares fell to 0.75 percent ahead of the earnings release, compared with a 0.95 percent fall in the broader market.

The 16 percent fall in the second quarter earnings was reportedly because fewer compact digital cameras were bought. Most of the consumers are now taking photos using their smartphones, according to Investing.com.

"Despite firm sales in Japan, interchangeable-lens digital cameras continued to face severe conditions in other regions while sales volume for digital compact cameras decreased in most regions compared with the same period of the previous year," the Japan-based company said in a statement.

Canon is currently investing in new business to offset the weak growth of its cameras, Reuters reported. In fact, earlier this year, the firm offered $2.7 billion to buy Axis AB, a video surveillance firm.

In 2014, the company announced its acquisition of Milestone Systems, a Danish IP Surveillance VMS Software Company. However, part of Canon's contract with Milestone is for the software company to work as a separate entity.

Apparently, fewer sales on digital camera is not the only culprit. The weak yen is also inflating the operating costs as the dollar is expected to trade at an average 125 yen for the rest of the year instead of 120 yen that was forecasted three months ago.

Japan Canon Inc. was originally named as Seikikōgaku kenkyūsho or Precision Optical Industry Co. Ltd. The company's name was changed to Canon Camera Co., Inc. but was later shortened to its current company name.

The company started producing cameras in 1934.

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