Nikon's April-September sales and operating profit beat its expectations thanks to a healthy performance from its camera division, and advance orders for a new model are also better than expected, the company's president said on Wednesday.
Makoto Kimura told Reuters in an interview that the world's second-largest maker of interchangeable lens cameras after Canon was not yet experiencing a slowdown in sales due to the debt crisis in the euro zone, but added he was concerned about a possible downturn in October-March.
We are seeing no surprising changes at this point, Kimura said. But with cameras it's going to be important to see what happens in the November to December shopping season. There is some evidence that dealers are putting off their purchases.
He added that camera sales tend to be relatively immune to changes in the economic environment, but that a sharp downturn would nonetheless affect the company.
Nikon is set to report its June-September earnings on November 4, about the same time as other Japanese electronics companies, several of whom have said they are battling an extremely harsh economic environment ahead of the crucial pre-Christmas shopping season.
The yen soared to a 10-year high against the euro on Tuesday, cutting the value of sales in Europe, while the dollar is hovering at less than 77 yen. Europe accounted for 23 percent of Nikon's sales in the year to March 2010, while the United States made up 27 percent.
Like many other Japanese firms, Nikon wants to increase euro-denominated procurement to help combat the yen's strength, but is struggling to do so, Kimura said.
In the latest evidence consumption is weakening, top British retailer Tesco Plc posted one of its biggest-ever quarterly falls in underlying sales on Wednesday.
Separately, Kimura said that the company expects to sell several hundred thousand units of its new compact mirrorless interchangeable lens cameras by the end of the financial year in March 2012.
Advance orders from dealers for the Nikon 1 models, which go on sale on October 20, are stronger than expected, Kimura said. He expects the model to take off in Asia first, but eventually also to sell well outside the region.
Rival Fujifilm Holdings Corp is set to release its own line of mirrorless cameras next spring, the company said on Wednesday, boosting competition in a market already crowded with competitors including Olympus and South Korea's Samsung Electronics.
Shares in Nikon fell 0.1 percent on Wednesday, but have risen more than 7 percent since the beginning of the financial year in April, partly on expectations for the new cameras, which pack many of the advantages of a bulky single-lens reflex model into a smaller body.
Canon has fallen about 5 percent over the same period, on concerns about the yen and consumption trends in Europe and the United States.
(Reporting by Isabel Reynolds and Reiji Murai; Editing by Joseph Radford)