Canon Inc posted an operating profit of 122.5 billion yen for the July-September quarter, compared with 104.4 billion yen in the same period the previous year, and it cut its annual forecast.

Market expectations were for a profit of 107 billion yen based on the average of 7 analysts polled by Thomson Reuters I/B/E/S.

The world's biggest maker of digital cameras lowered its annual operating profit forecast to 360 billion yen from 380 billion yen, compared with market expectations of a 383 billion yen profit, based on 20 analysts surveyed by Thomson Reuters I/B/E/S.

(Reporting by Isabel Reynolds; Editing by Edwina Gibbs)