Nikon reported their third quarter results today, and they're much as expected. The floods in Thailand completely shut down DSLR production there for over a month, and it didn't resume at all in the original plant until early January. Production won't hit "normal" again until late March.
That explains the drop in DSLR sales from 1.25m to 940m units year-to-year (for the quarter). Overall, though, DSLR unit sales are still up for the full nine-months that have been reported (3.67m compared to last year's 3.15m). Lens sales reflected the same trend (many popular consumer lenses are made in Thailand): 1.63m this year's quarter compared to last year's 1.85m, but for the full nine months 5.56m units compared to last year's 4.8m. Simply put, we're seeing what happens when a key plant is closed for a quarter.
On the other hand, Nikon sold compact cameras like there was no slump in compact camera sales. Nikon sold 6m Coolpix in the quarter compared to 4.9m in the same quarter last year. That's the most Coolpix they've ever sold in a quarter. For the full nine months, we're at 13.87m versus 11.6m, an 18% increase in unit volume.
That said, Nikon's forward projections for the full year (which ends at the end of March for them) is still aggressive. In fact, it's more aggressive than it was before the floods in Thailand: 4.7m DSLRs (same as before), 6.9m lenses (up .2m), and 17m Coolpix (up 1m). Translated into market share: DSLRs 31%, compacts 17%, for an overall camera market share of 19%.
The quake and flood also forced Nikon to up their capital investment by US$920m to replace equipment, but curiously R&D spending just took a big jump, too, hitting 7.7% of sales.
For those worried about prices, Nikon is projecting the yen/dollar ratio at 75 this quarter, and the yen/Euro at 100. As I write this, I'm seeing 76.26 and 100.3391 as the current ratios. As long as those exchange rates hold within 3% or so, I doubt we'll see any further price adjustments. Indeed, it appears from their statements that Nikon will be more aggressive in pricing in the Coolpix and Nikon 1 lineups shortly.
With the big Japanese consumer electronics companies mostly showing losses for the year (e.g. Sony), Nikon is projecting a bigger profit for the year than last, despite the highly down third quarter (-3.7b loss). Nikon actually upped their projected full year profit a bit.
Finally, an update on one key metric we all need to be cognisant of: 63% of Nikon's overall sales this year will come from cameras and lenses. I've been noting that Nikon is "two-thirds" a camera company and the only camera company that's actually mostly a camera company (all the others are massive conglomerates of which cameras are a small fraction of their overall business). So goes the camera business, so goes Nikon.
With the overall unit volume in cameras trending mildly downwards, that means that for Nikon to continue to grow they have to take market share from others. They've been doing just that in compact camera sales. While the fiscal years of Canon and Nikon are off by three months and that makes exact comparisons nearly impossible, Nikon predicts it has 17% of the compact market and Canon just reported 18.7%. That's getting remarkably too close for comfort. Of course the devil is in the details, because both those numbers would reflect what they shipped into subsidiaries, not what was actually sold to consumers. Still, I don't think Canon ever thought Nikon would challenge them in compacts, and now they are. This has to be worrying to Sony, Panasonic, and Fujifilm, as well, as Nikon's gains are coming at the expense of others.