Nikon today posted their third quarter financial results (for the last calendar quarter of 2010). Overall, the company reported an increase in sales and profit, mostly due to a recovery in the Precision division's sales of semiconductor manufacturing equipment. The Imaging division was a different story: slightly down in year-to-year sales and profit, but up in unit volume, especially Coolpix models.
Nikon sold 1.25m DSLRs, 1.85m lenses, and 4.9m Coolpixes in the last calendar quarter of 2010. That represents a slight increase in DSLR sales, a modest increase in lens sales, and a whopper of an increase in Coolpix units (20% year to year). Nikon called the DSLR and lens sales "favorable results" and blamed the lower sales and profit on the strong yen. Nikon changed none of their estimates for the full year (4.25m DSLRs, 6.35m lensess, 14m Coolpix). Given their estimates, it's unlikely that any new DSLR from Nikon will ship before April. Nikon's calculation of DSLR market share remains at 33%, Coolpix at 12.5%.
Nikon's "future outlook" also called out the following efforts for Imaging:
- Penetrate emerging markets. This refers to expanding marketing and sales in countries like India, China, Brazil, and others.
- Improve product competitiveness. Seemingly an admission that many of Nikon's products are feeling a little old and stale. A little Sony envy, perhaps?
- Improve customer satisfaction. No, that's not likely what you think it means. In Nikon-speak, that means products that you'll really like. The original D3 was a product Nikon believed would "improve customer satisfaction," for instance (and it did ;~).
- Higher than market growth. The market's not really growing much, so this is really means "recover lost market share."
- Improve profitability. Basically the usual call for cost cutting. It's difficult for me to see where they achieve that, though, as plenty of things have been pared to the bone already, including dealer margins.
- New generation digital cameras under development. Duh. The D4 is due in August and should introduce Nikon's next generation of technologies in the mainstream products, and Nikon's mirrorless entry is long overdue.
Current exchange rate assumptions are 80 yen to the dollar, 110 yen to the Euro. Bloomberg today reports 81.7 for the dollar and 111.7 for the Euro, so there's not a lot of wiggle room for any additional drift between now and April if Nikon is to make their current quarter numbers.
I haven't yet found any statement or explanation concerning the two 10b yen bonds that Nikon recently announced (other than they've been issued). That's about twice the size of the long-term debt Nikon retired recently, so it's a curious thing. I'd have to guess that there is an acquisition or expansion plan being considered that requires a big hunk of cash (and Nikon already has nearly 150b yen in cash equivalents on hand).
Overall, other than the surge in Coolpix sales (again), not much new or interesting.