In our house, there are no fewer than four cameras produced by Canon
Yesterday's second-quarter earnings announcement showed a 90% increase in unit sales of digital cameras for Canon, producing 34% revenue growth for the segment over the same period last year. There may be competition from the likes of Nikon, Eastman Kodak
Too bad cameras are only a lucrative sideline for Canon. The firm's real sales are generated in its business machines segment. Of Canon's $7.5 billion in sales for the quarter, $5.3 billion came from business operations, where margins are higher, to boot. Unfortunately, competition for the low-end printer market is cutthroat, and price battles with firms like Lexmark International
Price wars notwithstanding, Canon inked earnings of $0.90 per share for the quarter, a 17% increase, and the firm raised its full-year outlook. Free cash flow for the quarter was $521 million, and the balance sheets are more than healthy, with $6.4 billion in cash and only $356 million in debt. Those are impressive numbers, but at 18 times earnings and an enterprise value-to-free cash flow ratio near 17, the stock looks fairly valued for a big, slowish grower operating in such a hostile environment.
Join other image makers in the Fool's Photography discussion board.