Canon Inc. (TSE: 7751), the global leader in imaging and printing equipment with growing franchises in medical systems and semiconductor lithography, released its Q1 FY12/2026 consolidated earnings short report (Kessan Tanshin) under U.S. GAAP on April 23, 2026. Revenue for the three months ended March 31, 2026 rose 3.3% year-on-year to ¥1,093.7 billion (from ¥1,058.4 billion), but profitability compressed sharply across the income statement. Operating profit fell 26.1% to ¥71.4 billion, pre-tax quarterly profit fell 24.4% to ¥74.7 billion, and net profit attributable to shareholders dropped 33.1% to ¥48.3 billion. Basic EPS declined to ¥55.20 from ¥77.27 a year earlier. Despite the soft start to the year, management held its FY12/2026 full-year forecast unchanged.
Revenue +3.3% but operating margin contracts to 6.5%
Q1 sales of ¥1,093.7 billion were the highest first-quarter figure on record, with growth concentrated overseas: the Americas grew +1.2% to ¥291 billion, Europe +6.5% to ¥222 billion, and Asia & Oceania +6.3% to ¥341 billion, while domestic sales were essentially flat at ¥240 billion. However, cost of sales rose 5.5% to ¥588.4 billion (lifting the cost ratio from 52.7% to 53.8%), and operating expenses climbed 7.3%, with SG&A up 7.3% to ¥347.2 billion and R&D up 7.3% to ¥86.7 billion. The combined effect compressed the operating margin from 9.1% a year earlier to 6.5%. Canon noted that detailed commentary on the cost mix is provided in the supplementary briefing materials posted to its IR website on the same day.
Pre-tax and net profit fall harder than operating profit
Pre-tax quarterly profit declined 24.4% to ¥74.7 billion, a slightly milder drop than operating profit thanks to ¥2.2 billion of net non-operating income (vs. just ¥0.04 billion last year) — interest and dividend income held up while interest expense rose to ¥2.6 billion. Below pre-tax, the income-tax line declined 2.5% to ¥20.7 billion, but the effective tax rate jumped to 27.6% from 21.4%, magnifying the drop in net profit. After non-controlling interests of ¥5.8 billion, profit attributable to Canon shareholders came in at ¥48.3 billion, down 33.1%. The company also recorded a positive translation adjustment of ¥14.2 billion in other comprehensive income (vs. a ¥65.1 billion loss last year), driving total comprehensive income up +353.1% to ¥72.2 billion.
FY12/2026 full-year guidance held unchanged
Despite the weak Q1, Canon left its FY12/2026 full-year guidance untouched: revenue of ¥4,765.0 billion (+3.0% YoY), operating profit of ¥456.0 billion (+0.1%), pre-tax profit of ¥483.0 billion (+0.2%), net profit attributable to shareholders of ¥333.0 billion (+0.3%), and basic EPS of ¥388.42 (+5.7% — the per-share growth exceeds net-income growth thanks to ongoing treasury-share retirement). The Q1 result represents about 15.7% of full-year operating profit guidance and 14.5% of full-year net-profit guidance, leaving a steep ramp through the rest of the year. Note also that effective January 1, 2026, Canon switched its tangible-fixed-asset depreciation method from declining-balance to straight-line as part of its "Global Excellent Company Plan Phase VII" — a change that the company estimates will reduce full-year depreciation by ¥6.1 billion and lift Q1 net profit by approximately ¥4.2 billion (or ¥4.80 per basic share).
Balance sheet: equity ratio 55%, total assets ¥6.24 trillion
Total assets rose 1.7% from year-end to ¥6,237.9 billion, driven by a build-up in inventories (to ¥913.7 billion from ¥840.4 billion) and receivables (to ¥674.2 billion from ¥733.8 billion — actually a decline), partly offset by lower cash and equivalents (to ¥639.5 billion from ¥586.0 billion — increase). Shareholders' equity fell 1.7% to ¥3,433.1 billion as accumulated other comprehensive loss widened, leaving the equity ratio at a still-conservative 55.0% (vs. 56.9% at year-end). Operating cash flow declined to ¥24.5 billion from ¥71.9 billion last year on higher inventory and tax-payment outflows, while investing cash flow used ¥62.0 billion (vs. ¥51.4 billion) and financing cash flow generated ¥84.0 billion, leaving period-end cash at ¥639.5 billion.
Dividend held at ¥160 annual; treasury-share retirement continues
Canon's FY12/2026 dividend guidance is unchanged from the prior year at ¥160 per share annually (¥80 interim + ¥80 year-end), reflecting the company's policy of stable and active capital return targeting a payout ratio of around 40%. During Q1, the company retired approximately 10 million treasury shares, lifting the outstanding share count (excluding treasury) — issued shares stood at 1,333,763,464 at quarter-end (unchanged from FY25), while treasury shares fell to about 875.1 million. The company also flagged that its full Q1 earnings short report — including the auditor's review report — will be filed on April 30, 2026.
| Metric | Q1 FY12/2026 | Q1 FY12/2025 | YoY |
|---|---|---|---|
| Revenue (¥ billion) | 1,093.7 | 1,058.4 | +3.3% |
| Operating profit (¥ billion) | 71.4 | 96.5 | −26.1% |
| Pre-tax quarterly profit (¥ billion) | 74.7 | 98.8 | −24.4% |
| Net profit attrib. to shareholders (¥ billion) | 48.3 | 72.2 | −33.1% |
| Basic EPS (¥) | 55.20 | 77.27 | −28.6% |
| Operating margin | 6.5% | 9.1% | −2.6pp |
| Total assets (¥ billion) | 6,237.9 | 6,135.0 | +1.7% |
| Shareholders' equity (¥ billion) | 3,433.1 | 3,491.8 | −1.7% |
| Equity ratio | 55.0% | 56.9% | −1.9pp |
| Annual dividend guidance (¥) | 160.00 | 160.00 | ±0.0% |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.