Canon Inc <7751.T> posted a 30.9 percent decline in quarterly operating profit on Monday, hurt by production halts due to parts shortages after the March 11 earthquake, but it raised its full-year forecast due to a faster recovery than expected.

Canon's April-June figure came to 78.4 billion yen ($1 billion), which is higher than an expected profit of 55.9 billion yen, the average of six analysts polled by Thomson Reuters I/B/E/S, but lower than the 113.4 billion yen it booked for the same quarter last year.

The world's biggest maker of digital cameras also lifted its annual operating profit forecast to 380 billion yen, after having slashed it following the devastating March earthquake and tsunami to 335 billion yen from 470 billion yen.

Market expectations are for an annual profit of 365 billion yen, based on the average of 18 forecasts by analysts polled by Thomson Reuters I/B/E/S.

The printer and camera maker has said production returned to normal at the end of June after supply chain disruptions cut camera production by 3 million units in the April-June quarter.

Canon is the world's biggest maker of digital cameras, followed by Sony <6758.T> and Nikon <7731.T>. It also competes with Xerox and Hewlett-Packard Co in office equipment.

Shares in Canon ended at 3,785 yen on Monday, unchanged ahead of the results, compared with a 0.9 percent fall in the broader Nikkei average <.N225>. The company's share price has recovered almost all the losses sustained in the aftermath of the earthquake.

($1 = 78.355 Japanese Yen)

(Reporting by Isabel Reynolds; Editing by Matt Driskill and Edwina Gibbs)

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