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Canon Reports First-Half Results

July 27, 2005

Canon U.S.A., Inc., a subsidiary of Canon Inc. (NYSE: CAJ — news), announced Canon Inc. first half 2005 consolidated net sales of 1,755.8 billion yen (US$ 15,818 million), which represents an increase of 6.5% over the first half of fiscal year 2004.

Canon reported first half net income of 175.3 billion yen (US$ 1,579 million), an increase of 9.0% over the same period last year and a basic net income per share of 197.61 yen (US$ 1.78).

Canon Inc. also reported second-quarter revenue of 912.5 billion yen (US$ 8,220 million), 7.3% higher than second-quarter 2004 with net income of 82.2 billion yen (US$ 741 million), 7.5% higher than second-quarter 2004.

"In the second quarter of 2005, net sales were up 7.3% on strong demand for color copying machines and color laser beam printers in line with growing demand for color printing in the office. We also recorded robust digital camera sales growth, supported by strong sales of digital SLRs," said Toshizo Tanaka, senior managing director and group executive for Finance and Accounting Headquarters, Canon Inc.

Tanaka added, "Although we assume severe price competition will continue, we do not expect any major changes in the competitiveness of our products or our earnings structure. As such, we anticipate both net sales and profit to grow by between 5 and 6% in the second half. We still aim to achieve our sixth consecutive year of increased sales and profits, exceeding the all-time highs we set last year."

Read Canon''s financial results at www.canon.com/ir/index.html