Nikon’s yearly financial results are out

Here is Nikon's one sentence summary of the Imaging Company in 2011:

"Sales and operating income both increased in spite of yen appreciation and parts procurement difficulty."

This is what Nikon had to say about the impact of the earthquake on the 2012 forecast:

  • Disaster damages and plant recoveries:
    • In Miyagi, Tochigi, and Ibaraki prefectures, 1 plant and 7 production companies shut down their operations.
    • These plants gradually resumed operations by the end of March, now reaching the pre-disaster capacity.
  • Impact on supply chain:
    • Our parts supply chain was affected by the disaster. Full recovery is scheduled in this fall or later.
    • FY2012 is expected to suffer sales reduction of 120 billion yen and operating income reduction of 30 billion yen.

Financial results for Imaging Company for the year ended March 31, 2011 - higher sales and operating profits, sold slightly more cameras and lenses than previously expected:

Forecast for the next year (ending March 31, 2012) - Nikon expects to sell slightly more DSLR cameras and lenses, no changes are expected in the compact camera sales:

Detailed financial information can be found on

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  • broxibear

    “Although damages on our parts supply chain are substantial, both net sales
    and operating income are expected to increase with an assumption that the
    operations will normalize this fall or after. ”
    This is an interesting line from the report…”an assumption that the
    operations will normalize this fall or after.” This suggests that Nikon don’t know when their production will be back to normal, they’re guessing 4th quarter 2011 or later ?
    Overall as vague as I expected.

    Hi Peter, any information about the Q&A…I haven’t found any information ?

    • That’s correct. As all the Japanese companies are finding out, all those labyrinthine relationships are not easy to unravel and readjust when you need to. A really easy one to see: Nikon is dependent upon Sony for sensors but Sony is dependent upon suppliers, including Nikon, for equipment and raw materials. Another problem is that there was a lot of joint cooperation–for instance competitor X and Y decide to use the same parts supplier–but when that supplier can only supply 50% of what’s demanded, who gets the parts?

      But the real elephant in the room is still power. 60% of Japan’s nuclear reactors are offline, and there are some reports that could rise to 42 of 54 (78%). That just throws a monkey wrench into everything with the hot summer months coming up.

      • broxibear

        Hi Thom,
        The other thing that doesn’t make sense is this…
        “In Miyagi, Tochigi, and Ibaraki prefectures, 1 plant and 7 production companies shut down their operations.
        These plants gradually resumed operations by the end of March, now reaching the pre-disaster capacity.”
        How could they possibly reach pre- earthquake capacity with all the supply issues and power cuts ?…unless pre- earthquake capacity was extremely low.

        • BornOptimist

          One explanation could be adding shifts. As far as I know, Nikon Sendai only worked one shift. At least they did that back in 2007. If they add another shift they could compensate for the power outage (excluding the lens manufacturing plant). But this doesn’t help if they don’t have parts (like sensors). The Sony factory that makes the sensors almost certainly was running 3 shift before the disaster.

          • Just A Thought

            And who would man the proposed other shifts?? Fast training program in place at Nikon??

            I’m curious how suppliers are able to get materials into those areas. Have all the roads and bridges been repaired to pre-earthquake levels?? How about all rail lines? That’s good that employees are able to find gasoline for their automobiles to be able to get to work with the gasoline shortage as it is.

            Recently read stories about the people who were forced to evacuate near the damaged reactors and were allowed to return briefly to get some belongings and their descriptions of the damaged roads on the way to that area (news reports from approx a couple of wks back). I believe their honest report of damaged road condition as they would gain no benefit from false reports.

            As the T-shirt bought in Peurto Plata says: No Problema.

            • My understanding is that the main road system is not a bottleneck. Not to say that it’s perfect–there’s a lot of construction going on–but the last report I saw said that even large truck traffic was moving reliably, albeit sometimes more slowly. Many rail lines within Sendai have been restored. Roads and rails that were along the coast are a different story, but you can supply from the main roads to both Natori (Sendai) and Tochigi. One small problem: you can’t use the docks that were at Sendai, so things are getting in and out differently and less efficiently than before. Not sure about the airport–haven’t heard a recent report about it.

              The Fukushima exclusion zone is a bit of a different story. Because of the radiation issue nothing’s going in and out unless it has to, which means that they’re not sending repair crews into that area.

            • Jake

              I dont think manning shifts would be a problem for most Japanese companies. The dynamic in the japanese workplace is far different from our western employer/employee relationship. Simply put, Japanese workers are more loyal and hardworking! Seems like a massive generalisation, i know, but its true – i would assume that, if there ample parts, a lot of workers would be working longer or more shifts.

            • Martijn

              capacity and the actual work being done is a totally different thing. i have the capacity to shoot 1500 images on one SD card, doesn’t mean i can do it (for example, lack of subjects)

              same rules apply here i guess. they could technically work full-speed, but they can’t really because of lack of supplies

            • The roads into Sendai aren’t a problem any longer. The earthquake did indeed do some serious damage on the main highway north (very bumpy, but still manageable). The highway has been open to normal traffic for some time now (was originally closed only to limited traffic).

              Shinkansen (bullet train) service has also been restored to Sendai. It has not been restored further north, however. For regular rain lines, I’m not sure how much JR (Japan Railways) service has been restored. Normal trains use completely different rails than the bullet trains do. You can have the total loss of one, but service on the other.

              Last week, I flew up to Sendai (Senshu University) from Tokyo and was watching a south-bound Shinkansen. It was going very slowly. I’m guessing that it may have been right after an aftershock (we still get them quite frequently) or due to some issue with infrastructure.

              Regarding ports, here’s a shot I took while flying over Sendai:

              Things are not normal and I don’t expect them to be back to normal anytime soon. That being said, they are doing some amazing work on cleanup in that area. Absolutely fantastic. But it’s slow going getting all the pieces of the puzzle put back. The sheer scale of what happened is almost unbelievable.

              Someone I worked with a few weeks ago up in Minamisanriku (in the group OGA for Aid) just posted a few photos on Facebook of a 7-11 operating in the disaster area. It was a 7-11 branded cargo truck parked at the side of the road. The workers were standing behind a fold-out table ready to take orders for bentos (ready-made meals/lunchboxes). There is nothing else around but devastation. But it’s scenes like this that show things are *slowly* putting life back into the area.

              When I was there last month, I saw a gas station that was open. The building and everything within site was destroyed. But the gas company had put some new pumps in and they were doing business. If one didn’t know there were underground tanks, it would’ve looked like magic. It was also striking- they had a sign advertising that they could fix tire punctures. The only thing left of their building was some framework, not much else. I’m not sure how they went about that, but… like I said earlier, they are doing what they can to get back to business.

              I’ve kind of mixed up the information here talking about devastation, yet a working bullet train. Just keep in mind that not all of Sendai was destroyed. Some of it is just fine. It’s just the areas vulnerable to the sea that were destroyed. So not everything is gone. Regardless of not everything being destroyed, there was a very high human cost and that is a huge point to keep in mind.

          • broxibear

            Hi BornOptimist,
            I was referring to parts and where the parts would come from if the suppliers can’t make them, but Just A Thought makes a valid point about employees. These are highly skilled workers, they more than likely lived in or around Sendai… it’s a real problem
            Thom makes a good point about Sony sensors, if Sony are short of sensors because of production problems who do they supply…their own camera division or Nikon ?
            Everything is so interconnected that one problem at a particular supplier has a massive domino effect for many others.
            All I can see are long delays, or in the case of a couple of coolpix cameras cancellation.

            • Parts and chemicals/materials seem to be the main issue, not labor or even power (yet–this summer will be a real test of that problem).

            • kururu

              yes due to parts supply chain problem from northern Japan, a lot of my friends now still working 2 days a week ( from 5-7 days per week). we lives in central japan, far from earthquake epicenter.

            • Just A Thought

              Thom’s reply/post about improved road and rail conditions is a really good sign. Being able to reliably move heavy transports in and out of the striken areas is a positive game changer in many ways. BTW thanks Thom for that updated info.

          • One thing that a Japanese friend of mine told me the day before made me wonder how this applied to the camera companies. Her and her husband just bought a new car. However, the model they wanted apparently was a 6-month wait away from arriving once they sourced parts. Her husband’s thought was to grab something on the lot right now rather than wait for something that may have been rushed through with lower quality parts.

            The Japanese are pretty understanding/forgiving when it comes to many things. Not that everyone is the same- because they’re not; but when I see reactions like this, it makes me wonder what is actually going on behind the scenes sometimes.

            My job in Japan gave me a view of things that ordinary people will never know or see. So I just wonder if he knew something that the rest of us are not privy to.

            All of this is pure speculation (even my friend’s husband’s actions are speculating on a perceived outcome), but something to think about.

        • Capacity is not utilization. Capacity refers to capability. Utilization refers to actual output. I think Nikon’s saying that the plants are capable of their old production levels, not that they’re achieving them.

          • Global

            Thom is correct about capacity. Its one of those weasel words when English speakers use them, but strictly speaking it refers to ability to produce, not actual production.

            It sounds good for stock holders anyway.

            • PHB

              It means that Nikon is not standing in the way of anyone else recovering. That is quite significant in itself.

              My guess would be that they are attempting to (1) second source components in short supply (2) switch to producing goods that are not source limited (3) applying any resources that are unable to produce due to supply difficulties to long term improvement projects such as configuring machines to make new product lines, deploying efficiency upgrades, painting the factory, etc.

              Problem with just in time is that everything is linked together and when multiple things fail at the same time the whole system goes pear shaped.

          • Jabs

            Let me elaborate a little.
            Capacity refers to your ability to build a certain quantity of an item in a certain time or period.
            Utilization refers to how much percentage-wise you are NOW using or IS available for use of this capacity.

    • Just A Thought

      Sales increased approx 4.7%, but operating income increased only 0.38% – essentially flat. They got to sell more stuff but had more or less the same operating income. Plse correct if I made a mistake in calc. Now compare Apple’s sales and income growth in the same period.

      • Tony

        Raw material cost, transportation cost, management cost, etc.

        You’re right about the OP income though, it seems low. I think maybe that why Nikon is trying to change the way company operate such as limiting the number of authorized retailer for example.

      • Always keep in mind the exchange rate as well.

        I wonder if Nikon purposefully tried to dry up the inventory channels so they could change the pricing and then reintroduce products at the higher rate.

        Financial sector/manufacturing & supply are not my ballpark, so I may be completely off.

    • I have not seen any Q&A online yet.

  • The invisible man

    dickhead ?
    What is that, an other usefulness accessory for the SB-900 ?

    • The invisible man

      never mind, I just found out

  • If they can make less and sale more the whole time, what were they doing before the earthquake.

    • TaoTeJared

      That is an indication of higher value items coming to market. D400, D4, D800, some new higher end lenses, and maybe a mirror less something. All of which are higher dollar items vs the digi cam market that was refreshed this year.

    • Merv

      Maybe less rebates?

  • Looks like about 20% of the year’s production will be lost. If production is running below maximum for some period of time, it takes about that much time again for things to recover. In other words, pro gear will be scarce for almost another year. With the Olympics on the way, us mere mortals can expect nada until the event is over.

    • Not sure how you got to that number. Nikon is saying that production will be equal to last year basically, so you’d be saying that Nikon would have grown sales by 20% this year. That seems optimistic to me in the current market.

  • Looks like our choice to use two D7000’s with our pro glass was a good one. I don’t see a D4 or any other pro body getting into my hands for the rest of the year. Thank God we have these D7K’s and some choice pro glass. In the mean-time, we’ll be saving for a D4 once we can finally get our hands on one.

  • TaoTeJared

    Great post! I love this type of info and think we need more of it!

    What it says: New bodies are coming based on that info.
    What it also says: They will come very, very slowly.
    Yen is dropping in value quickly but they are running the business side very well to account for this.
    Prices will rise (at this point in time) probably 10% due to the value of the Yen but we have known that for 6+ months.

    The good thing to look at is that Nikon was probably 90% done with the new “PRO” lineup bodies coming out before the Earthquake so it will just come to part availability rather than everything else in the design process. Future releases (3200, 5200, 7100 etc.) will suffer as focus will more than likely be taken away from these to help rebuild from the damage and pump out releasable products. Timing is everything.

    • The yen is not dropping in value. It is being artificially held down. If the big central banks weren’t intervening, most economists believe the yen would appreciate rapidly. Because of the artificial yen manipulation, it’s stayed virtually at 80/dollar since the quake two months ago.

      • dbas

        The People’s Bank of China lifted bank reserve requirements for a fifth time this year. Will further tightening affect Nikon’s operations?

  • Joe

    The forecast really makes me doubt if mirrorless is really coming out soon or not. Normally, one would expect the forecast to be noticeably higher than previous year as Nikon is stepping into a new market.

    • Good point. The D3100 and D7000 are selling well, so if a mirrorless entrant between the Coolpix and DSLR line appeared it would imply that the unit volumes should go up significantly. Of course, Nikon didn’t actually predict actual unit volumes, so we can’t tell exactly what’s going on.

      • Luca

        More than this. They should forecast a raise in sales due to the introduction on the market of their new PRO models, such as D400 (if any!) and D800, as these should sell better than the old ones when available.

        So probably we won’t have any EVIL PRO camera from Nikon this year; and this is a pity as the only (semi)PRO camera on the market inho is the Ricoh GXR.

        And probably we won’t any FX/DX PRO new glasses, which is even a worse pity because Nikon doesn’t understand that having a bigger and better lenses line really make the difference!

        • A D400 would definitely show as a small blip in sales, a D4 wouldn’t. A D800 is harder to figure.

          The D3100, D5100, D7000 probably are running at 3.5m units a year. A D4 would run at no more than 30k units a month the first six months, and to achieve that it would probably keep D800 production down, too. A D400 would be a high volume camera, with targets in the 100k unit/mo range initially, but it would be replacing a D300s that may already be out of production.

          Nikon worded both their written and verbal remarks on future unit volumes very vaguely, so it’s difficult to assess how much the flat sales is attributed to lack of parts for existing products versus later introductions of new products. I still haven’t seen any remarks in the business press giving us any additional detail.

          I should point out that Nikon gave the standard Japanese business line: “we expect full recovery sometime in fall.” But I think a lot of this is just parroting–nobody knows for sure yet how fast the recovery will really be. Basically, the “fall” timeline is a statement about power availability. In the fall, power demands will go down and factories should be able to operate full normal shifts.

          Personally, I’d bet against that. And there’s a hint that Nikon thinks similarly to me. Let’s assume, for example, that output is evenly only 60% norm from now through September. 60% of the materials necessary for glass, metal, plastic, and semiconductor production, 60% of the output of final parts. You’ve got ALL the Japanese companies looking at 60% sales in that case. The bigger ones will use money to get priority position. There will be strong availability disparities coming into fall, I think. And it’s not like 42 nuclear reactors suddenly turn on in fall, either. It’s mostly reduced air conditioner use that’ll create more available power. A longer, hotter summer would impact things, too.

          I really think it’ll be the end of the year before we see some level of normalcy in Japanese production, and if it takes that long, there will be some casualties along the way, which will further lengthen the recovery.

          • broxibear

            Hi Thom,
            The other thing no one’s talked about is when do Nikon stop production of the D700 and D3s ?
            These bodies are on back order at mainy UK retailers, a lot of customers have ordered them and may not want to pay the extra for the D800 or D4. Do Nikon fill those orders before announcing the new models ?, Do they cancel the orders ?, Do they run side by side ?…it’s going to be a big problem.
            I remember when the D3s was announced, the D3 didn’t fall in price it just became more difficult to find in stock, and the last few new bodies in the UK sold at the same price as the D3s…it’s a strange market the high end dslrs ?

            • What I haven’t been able to determine is what Sendai was making when the quake hit. If it was still D700 and D3s, then you’ll see those models continue to trickle out now.

              Much of Sendai was metal machining equipment. When models change over, obviously the equipment has to change what it’s making, too. That usually results in some lower production of current stuff as they start initial builds of future stuff. Sendai also could have been in that phase, too.

              We’ll know soon enough. We had a small delivery of those models in late April that had to have been WIP at the time of the quake. In theory, if what Nikon says is correct, we should get another blip of inventory sometime later this month. How large that blip is will tell us a lot.

            • Jabs

              Since the majority of machine work is now computer controlled design, then there is no disruption via new models. You simply reprogram the computer and then have separate Assembly lines and that is how they are able to make a D3, a D3S, a D3X, a D700 and even upcoming models on the SAME equipment. Everything is now programmed and the computer controlled machinery is fed materials and out comes whatever they want machined for each camera line without affecting other camera lines. Nikon was probably in the process of making small quantities of unannounced Pro bodies and testing Production when the quake hit, so no disruption due to new models.
              Products now go from Computer Aided Design to Computer Controlled Machining directly and thus greater flexibility in Manufacturing. Even plastics are now being made that way as in 3D “Printing”.

            • Hendog

              I disagree. No production line stuff is sent straight from CAD to final parts output. Especially not plastics. They still need to have steel tooling done for the moulds to produce plastic parts. 3d printing is extremely slow, extremely expensive and produces inferior plastic components. It is useful for designers and in the pre-tooling stage though. It is NEVER used for any sort of production whatsoever. To change a production line to produce another product requires a lot of messing around and is not done on the same equipment unfortunately. They would have simultaneous production lines for their different models though. All the machine setup required for a new camera model for the plastic parts alone is a pretty major undertaking.

            • Jabs

              Unfortunately, you are in another century perhaps. The MAJORITY of Metal Production is now done on computer controlled machinery wherein you simply create your Production ready models and then send them to the Milling machines to be made, so it is a SOFTWARE model change (usually within the same Program – like loading a new file) that is all that is needed.
              Get with the times bub!
              Plastic Production is slowly evolving to 3D ‘Printing’ via lasers e.g., NOW, but metal Production HAS BEEN computerized for eons now. There are generally NO changes in equipment necessary to make a different metal component anymore!

            • Jabs

              Here is some more information plus read up on CNC machines that make everything from wood to plastics. Ever seen the amount of transparent plastic headlight and tail lens replacement parts that are popular now? Well, most of them are made on CNC machines by small shops and the larger shops/Manufacturers have bigger machines that go from CAD or CAM programs to CNC machines for production of almost any part.

              Nikon hand assemblies much but computer designed and manufactured parts are what are assembled.
              Look here.

  • If you compare Nikon D700 with 24-70mm F4 for $5.249 and Canon EOS 5D Mark II + EF 24-70 mm F4 for $4.374 you have very similar products, but for very different prices. This prices are from Czech republic internet shops.

  • camaman

    Less profit means they must release new stuff sooner cause old stuff is boring to consumers!
    —D800! ! !
    LOL! 🙂

  • Brock Kentwell

    120 million yen is like 5$US, right?

  • Knockwell

    “…Full recovery is scheduled in this fall or later….”

    Yay, D900, D500, 50 f.1, 80-400 VR, 300 VR announcement in the June and available in the fall

    🙂 Now this is rumour 🙂

    • Nah, not June. Historically August. If things go as Nikon just presented, there’s a fair chance that the D4 intro would just stay where it was, which was in August. As I noted previously, the D3 was an August announcement and a December ship. If things are stabilized by fall, we could have a repeat of that. If it takes longer to stabilize, we won’t get an August announcement.

      • Joe

        so where is the D700 replacement? I wonder if it’s possible to be a dual release in Aug, D800 and D4, just like D300 and D3 in 2007.

        From the sales and marketing standpoint, it doesn’t make sense to renew it later than 2011. Obviously the high demand of the new camera is here already, many people are waiting for a compact FF with higher mp, video capability and D3s-level iso performance. (I assume D4 will have some other breakthrough to keep its flagship position) D700 is already the oldest Nikon DSLR camera that hasn’t been replaced yet. If they wait for another year more, Nikon may be losing quite a bit of sales to the other camps given that if Sony and Canon manage to introduce new FF this year.

        • It could have been a D800/D4 intro planned for August, but that would also tend to indicate to me that a D800 wouldn’t be made in Japan. I don’t see how the Sendai plant could have built the volume necessary for that kind of launch.

          Nikon has fallen behind in equivalency before (and the D700 itself is a good example). It’s really how good the product is when it appears that drives Nikon’s DSLR lineup. They’ve made few mistakes in this regard, though we’ve had to wait longer than we wanted to for what we really want several times.

          I don’t believe Sony will launch another full frame camera this year. From a strategic standpoint it’s a diversion of resources from what they need to announce (A77, NEX-7, a buttload of lenses). As much as all of you think that those expensive full frame cameras must be driving profits, the fact that they’re expensive means their volume is far less. A D3100 will bring in more profit for Nikon than a D800. Same is true on Sony’s side.

          Canon, too, is late in launching their next full frame generation. That really has my curiosity. It’s possible that they discovered that 30+mp just doesn’t give a lot of bang for the buck.

      • AnoNemo

        Thom, I have a question for you. I just read Nikon’s year end presentation and this line caught my attention. How would you interpret this:

        These are their goals for this year:

        “Imaging Company:
        •Develop emerging country markets and strengthen penetration into them.
        •Develop new generation digital cameras.”

        For me, this means that they are not ready with the new pro-dslrs. They’ve been saying that they develop the next generation of digital cameras in every single management discussions since 2005.
        What we want to hear is that they will launch the next gen. digital cameras. What do you think Thom?

        Read the rest of it here:

        • Wouldn’t read too much into that. “Develop next generation digital cameras” has been a boilerplate line in their presentations for years. Those two bullet points tell us nothing we don’t already know. They’re there to tell shareholders “yes, we know we need to keep working on these things.” I’d only raise my eyebrow if something new appeared in those placeholders or they used an adjective they hadn’t before, as in “develop new smaller next generation digital cameras” or “develop next generation digital camera with phone integration.”

  • Jabs

    Good to see Nikon making progress despite the setbacks in Japan from the earthquake and tsunami.
    Nikon seems to have accepted that point and shoot cameras have become a commodity with flat growth potential and that the lower end, ‘prosumer’ and pro DSLR markets perhaps are where real growth lies. I see more production going to maybe Thailand and Malaysia or even South America (closer to North America) as the factories and infrastructure are being repaired. I don’t see Nikon introducing a so-called mirrorless camera system now, as point and shoot cameras have become a commodity, so introducing a new system in troubled times perhaps makes no sense now. I see them as stating that they will be concentrating now on their past strengths and filling out their line instead of starting a new line of cameras and lenses. That is like climbing out of a hole going in several directions – epic fail.
    I also don’t see sensors or such as the problem, but I see them as having been already stockpiled (sensors) and thus their current condition is what concerns them. I see other sub-assemblies as the real problem, as Nikon has already designed and tested the D4, D400/D800 series already and some of it seems to already been at least test produced, but the associated items that would tip off competitors as to what Nikon is up to, have been delayed, so a delay to market until that supply chain is corrected, seems more prudent to me. Japan’s ‘just in time’ delivery and Production system has taken a hit, so they will have to resort to probably outsourcing or offshore sub-assembly construction with final assembly now taking place in Japan to maintain their made in japan designation. I always admire the Japanese people’s ability to overcome large obstacles and do workarounds that bring even better products to market. Let us all be very patient and then use what we have until better and more products come our way.

  • Jabs

    Hey Administrator:
    Please correct this –
    Here is Nikon’s once sentence summary 0f the Imaging Company in 2011:

    Should have been:
    Here is Nikon’s ONE sentence summary 0f the Imaging Company in 2011:

    • I swear I have gremlins in my computer

    • Common Sense

      you’re sillier than silly, bra!

  • Jabs

    These CCD manufacturers were not affected by earthquake or tsunami in Japan.

    • I’ll repeat, there’s a difference between capacity and utilization. The sensor manufacturers were greatly impacted by the quake and are not operating at capacity as far as I know. There were shortages of critical materials necessary to fab, a fab takes a long time to come back up after a rolling blackout, and more.

      What everyone should be looking for are statements that say “output is back to normal.” Haven’t seen one yet.

      • Jabs

        @Thom Hogan.
        Again, you are over thinking and not paying attention.
        It said CCD Production and as far as I know ALL of Nikon DSLR’s use CMOS sensors.
        The CoolPix line is what is affected.

        • Jabs

          Correction – ONLY the D3000 uses a CCD sensor and it is still listed on the Nikon USA web site.

  • no surprises here, good to hear japan is making big progress

  • Matt

    I don’t understand the opacity. At this point, why not address some more of these bigger questions, at least by saying where they’re looking for answers to certain questions? Who benefits from these single sentence releases of nothingness? Whether the forecast is up or down, investors don’t like surprises. But this isn’t even “guidance” as much as “obfuscation.”

    And is there even anything to be gained by introducing this mirrorless/EVIL vaporware now? What’s their entry positioning at this late date, other than “Hey, us too!”?

    Add this to the longstanding lack of attention to fundamental product evolution issues that have been very well articulated by Thom, and it really makes me wonder if they get it at all. Their judgement is really in question. Are they even pretending to pay attention? Is Nikon being run by the ghost of Howard Hughes?

    • Jabs

      How do you articulate something that you are NOT privy to? Do ‘educated guesstimations’ make you now correct or even a genius – LOL!
      You folks THINK too much and take RUMORS or guesses as facts, hence WHAT?
      Nikon is doing fine and quite smarter than anyone here apparently.
      Can’t make enough of them due to real demand – FACTS!
      Plus, both cameras are revolutionary products – you figure it out now – OK!
      Back seat drivers – always ‘know it all’ – LOL!

    • Nikon is no different than any other company in announcing results. They’re actually slightly more transparent than most Japanese companies, as they provide additional detail that many leave out of their financials.

      You have to remember that these announcements are for shareholders. Basically they’re providing the audited data for the first time. All of us who analyze such data jump on our statistical machines and start parsing the numbers for “hidden” information or trends. You don’t make detailed product statements or explanations at financial results meetings normally.

      As for “guidance,” all bets are off in Japan at the moment. There is no guidance that can be trusted, because there are far too many unknowns. Every company from Toyota down to small suppliers has basically said “we think we’ll be back to normal in the fall.” But they’re guessing (actually parroting the government’s weak statement about power normalcy returning by fall). Behind the scene, they’re all scrambling because they all have materials and parts shortages that they have to deal with. And the power situation and the fact that a number of critical small materials and parts plants were completely obliterated by the tsunami means that there are fewer choices for finding what they need quickly. The Coolpix line has been hurt by the loss of a plant that makes lens barrels for them. There’s one lens from another company that can’t be made until they find a new supplier of a simple metal part. Meanwhile, plants that MAKE parts are hurt by the power shortages. Glass, chemical, wafer, plastics, rubber, and metal plants have machines that don’t like rolling blackouts. If you have to turn the machine off for a blackout, it doesn’t come right back on after the blackout. You have to warm it back up, and in some cases, do complete alignment and tolerance testing.

      So I don’t know how you give guidance in that situation. My heart really goes out to the Nikon staff (and other Japanese companies as well), as they are in really murky waters without a mask. Everyone’s feeling their way through the problems right now, usually discovering new ones as they do.

      • I can say from experience that the rolling blackout issue is HUGE.

        As a bit of a primer for everyone, I’ll try to explain a little of what makes things so complicated.

        First off, it’s not a blanket blackout over Japan. The blackouts are spread out into areas (and sub-zones). An interactive map showing these areas can be seen here:

        So a schedule is made which is different daily (I believe in order to promote fairness; also possibly in order to maintain a power balance).

        Say Company X is scheduled for a 3-hr blackout at 9am. That may or may not happen. There is an hour time lag where X is a holding position. The power might just go off suddenly at 9:37. Might not go off at all. However, once it’s off, what do you do with your workers for 3 hours? Do you want to pay them for 3 hrs of work if you don’t have anything for them to do? Since we don’t want to waste money, we’ll have them come in at 12:00 or so to get started. Start later, run continuously. Not much of a problem unless you’re paying them more due to the odd schedule. Ok, so now X is possibly paying workers more (most likely not, however) and losing possible business during 3 hours of the work day, but able to run the equipment due to workers coming in later. 10am comes and goes. Power didn’t go off. So now, staff are unhappy about having rescheduled their work day into the evening in order to work around a power outage that didn’t happen. Keep in mind- most of these people have families and can be adversely affected by schedule changes into the night time.

        So that’s Day 1. Day 2, Company X is scheduled for blackout from 1pm. Rescheduling workers becomes a little more difficult. Also, Company X requires 1 hour to warm their equipment up as well as a 1 hour shutdown. So on on top of rescheduling staff, now managers have to make sure that the equipment is able to be shut down safely before the next projected blackout. So on a day like this, how cost effective is it to run if you have to split the day up? How early in the morning can you start before workers begin to balk; before they begin to make mistakes because they are tired; before you begin to stretch labor laws?

        I’m not going to go past Day 2 because I think you can see suddenly how complex the issue becomes. Just extrapolate from what I posted above to see how the rest of the week may turn out. It’s a mess. And it will just get messier once the big companies start putting their feet down and complaining. Canon might be able to swing a larger club, thus get better hours allocated to them for their lens plants. What about Nikon? I’m not sure if them being in the Mitsubishi keiretsu allows them any status or not. Really no clue there. Regardless, a lot of anxiety over the power situation. And this year is looking to be hot.

        A friend was just telling me about riding the Toei subway line- apparently the deepest subway in Tokyo. He said everyone was already soaking with sweat. And it’s only May. Personally, I think there’ll be more than a few deaths of senior citizens due to the heat. I don’t know if that will swing public opinion or not or if that sort of publicity will change how the situation is dealt with.

        Tough times ahead over here. When you hear “rolling blackouts,” don’t assume it’s going to be a simple fix- it’s really not simple at all. There might be companies going out of business if they can’t manage the situation well enough.

        And for anyone wondering why I know any of the above, it’s because I live here. I live in Tochigi, so I’m halfway between Tokyo and the Fukushima reactors. I’m affected by the blackouts as well as the radiation. But for us here, they’re just facts of life that we’re trying to figure out how to live with as best as possible. I only stated the above so readers that don’t live here could get a bit of an inside view of just how critical the situation is. Nikon (nor anyone else for that matter) isn’t trying to make anyone unhappy by delaying or cancelling things. I’m sure their executives’ minds are spinning non-stop until late every night trying to put all of the pieces together here on how to run most efficiently.

        If Nikon pulls a strong year out of all this, I’ll be amazed. They’ll definitely have my respect because I know first-hand how aggravating the rolling blackout situation is.

        • Jabs

          @Fried Toast.
          Thank you very much for your dose of reality and the perspective of your posts here. It is quite different to view the information via the Internet (even with Google Earth) versus your own eyes as in living there and experiencing the problems yourself. I hope life is not too harsh for you now and that your family and friends are not filled with despair from loss of life or normalcy. This destruction is too wide for me to even figure out how I would cope, much less come to grips with. Humans do go through lots of suffering and then somehow bounce back in a world gone mad from natural disasters and man made disasters in unfair wars and such.
          Have a great day and thanks for some reality here! I hope that you are coping with the disaster as best as you can.

          • Thank you.

            I know Japan’s gone off the news radar, so I like to interject a bit when I can. There are many, many things that I don’t know, so make sure to take a lot of my guesses with as many grains of salt as you can handle.

            Life’s not too bad for me. At this point, it’s a matter of convenience, so I can’t really complain. Which is why I try to go up north to volunteer and help out the people that are really hurting. No home, no car, no income, no running water, shortage of foodstuffs, oftentimes no family… I’ve got the internet, running water, fancy Nikon cameras- don’t worry about me. Do what you can to help out those people that are in need (and not just Japan- Haiti, Burma, US midwest, etc. as well).

            Here’s what some of us are doing here:

            I might be heading back up tomorrow or the next day, so may not be able to respond much more for awhile.

            Just don’t forget the people here- their communities will be years in the rebuilding. And for some of them, memories is all they have left of their families.

  • Louie

    Does all this means prices will go back down to pre-event prices??? doubt it…

    Nikkor’s 24-70/2.8 went from $1,799 to $2,049 in less than two months. Someone’s making money, and it sure isn’t me… :/

    • JP Dyno

      Yeah, Serves me right for watching the $AUD rising and thinking “I’ll just hold off a little longer on that 24-70/2.8 and see how it goes”…

    • I’d say no. Prices are likely to stay high.

      The number I keep hearing from Japanese businesses is 40%. That’s the percentage of output now versus what it normally is. Even if it isn’t that particular number, it’s clear that the number is significantly less than 100%. Which means supply will continue to be low. And we know demand was already high because even at 100% output many of the high-end products were in short supply, some in near zero supply.

      Let’s see, if I remember my economics classes right I need some calculus to do the correct math (lengthy supply constraint tends to eventually reduce demand as it goes elsewhere)… Uh, not today, thank you. My brain is already challenged today ;~) But I think it’s safe to say that supply won’t catch up to demand any time soon, so price pressure will be upwards. I also don’t know for how long the yen can be held stable against the dollar. The pressure there is also upwards. I also would guess that parts procurement is more costly now, so that’s also upwards pressure. I see nothing ahead that even resembles downward pressure, so I’d say prices will hold or go up for the foreseeable future.

      • D700guy

        Jeeze, I can only pray that my D700 doesnt go boobs up in the interim.
        A quick gander at B&H tells me that NONE of the FF camera bodies are available, much less replacement models due out in the future.
        So far, so good though. (knock on wood)

  • broxibear

    “Nikon surged 6.5 percent to 1,768 yen after it
    forecast its net profit to jump 54 percent to 42 billion yen in
    the current business year to March 2012 on strong digital camera
    demand and further expansion into fast-growing markets.”

  • Jabs

    You know what gets me chuckling here – how naive people here are.
    They expect Nikon to lay out all of its’ plans and TIP OFF all of its’ competitors just to satisfy or sate THEIR own desire for details, product trends and release schedules.
    I have a few air conditioning units to sell YOU for your igloo in Alaska!

  • Jabs

    I am also GLAD that none of the posters (including me – lol) here run Nikon, as all of Nikon’s competitors would run over them.
    Most of you here obviously do NOT understand Business strategy as in NOT tipping off your competitors as to what you are up to or what you are about to release or either what specific STRATEGIC problems you are having besides the obvious.
    If you expect transparency, then you are not only naive, but about to tip the Company over into the river and drown it – LOL!

  • Fab

    After reading this article I’m quite sure that there will be very soon a new major announcement of pro or semi-pro cameras. If Nikon expects to rise DSLR sales by the end of Q1 2012, i think they are about to launch new products NOW.
    Sales are now slowing down, due to shortage of cameras on the market and to unwillingness of people to buy *old* technologies. After announcement new products will take a couple of months to hir the shelves. So if a increase is due by next Q1 new cameras must be available to buy as soon as possible


    • The D5100 was launched in that quarter ;~). Q1 2012 for Nikon’s financial year is Apr-Jun 2011.

    • ElanSE

      I was at Nikon UK recently, and thought that the camera line up on display was interesting:

      D3X, D3S, D300s, D7000, D5100 & D3100

      I wasn’t surprised to find the D5000 and D3000 missing nor the D90, since they have been superseded. But the D700, that was an interesting omission.

      • broxibear

        Hi ElanSE,
        Maybe they sold it on eBay… used D700 prices are now the same as pre earthquake new prices in the UK.
        If you bought a used one early in the year you could sell it and make a profit…strange days.

  • dbas

    A beat on both the top and bottom line. However, the stock price is still 17% off it’s pre-quake levels, and nowhere near it’s 2008 high. The dividend is paltry, and this might be a good time to take some profits off the table.

  • Nikon financials were considered a good news, because their stock gained 9.6%:

    “Nikon surged as much as 9.6 percent, the biggest intraday increase since April 2009, and traded 8.4 percent higher at 1,799 yen as of 9:35 a.m. on the Tokyo Stock Exchange.”

    • Just A Thought

      If it was “considered a good news” then the stock price would have been rising weeks or least days prior to the release of the financial data as those in the loop would have started to buy Nikon shares for their inventory to sell to the general public after the data was released. What was the trading volume??? Trading volume is just as important. A rise on low volume could mean that some folks are playing games to unload positions on a unwary public – then they pull the rug from under them – good fun except for those who end up holding the bag…..there’s an old saying Sell in May and go away…

      Their operating income did rise a comparatively tiny amount on an increase in Net Sales of over 4%. What was so spectacular about that to justify 8-9% stock price surge??? Wonder if the Japanese Gov’t has been buying the Japanese Markets like the US Fed has been doing in the US???? An under the radar way to support Japanese industry???

      • dbas

        MACD, RSI, and stochastics have all turned positive. If this carries on to overbought territory, you could be on to something.

        Out of the money calls, anyone?

        • Just A Thought

          Just checked the chart. Gapped up at open. Topped out during dummy hour (I assume it’s similar there as in US markets) and headed lower. Closed below the open. Looks like it was driven by huge volume at open 1.4 Million shares (not sure if Google using a volume multiplier – looks like it is not for Nikon trading in Tokyo). The rest of day trading dropped well below 100K per whatever tick period Google is using (retail investors buying small amts – no deep pocket order spikes during the rest of the day in my opinion). I predict that Monday trading looks like it will end up being a down day.

          Because the price broke broke up above the May 02 high it could be a relatively safe short term trade to the upside (I would wait to see if it can fill the gap by moving above 1845 – Mar 11 2011 Low). I’d use a tight sell stop at 1645 if I played this. Personally the risk/reward is about equal and so would not warrant my attention. A potential reward at least three time greater than risk is important to me. But then again, I’m not Nostradamus and can’t predict the future price.

          Plse note that the above is not to be deemed as investment advice. It is posted for entertainment purposes only. Plse seek out the advise of your own personal investment adviser and/or broker. Always do your own due diligence before placing bets at any stock market casino.

          • Just A Thought

            Forgot to mention resistance at around 2000.

            • dbas

              Some may argue that we’ve broken short-term resistance of 1715, and support is now 1593. It’s a tight channel, and may warrant a neutral option strategy (i.e. short straddle, butterfly spread, etc).

              We’ll see what the tea leaves say.

          • Very good points. I had noticed the day’s volume pattern, too.

      • Jabs

        @Just A Thought.
        You are over-thinking the situation. Based upon the disaster in Japan, several analysts had expected lower sales and earnings, so they were surprised by Nikon’s exceeding these PROJECTIONS of theirs, hence the Stock went up. Many items are sold on a long term basis via Contract sales, so they probably are also reacting to that.
        Simple – as Nikon also makes semiconductors and Measuring Equipment that is used in Construction, so they also gain from the Reconstruction in Japan – hence positive news even in this disaster.

        • Just A Thought

          “You are over-thinking the situation.”

          Could be – it would not be the first time – grin…

          Thanks for sharing the info in your post – interesting read.

        • ADL reported record gains in semiconductor equipment sales recently, too, but cautioned against uncertainty in terms of forward delivery schedules. Nikon might have a bit more certainty there due to some intertwinement with customers, but I think it’s too soon to say how fast replacement/recovery/expansion happens with semiconductor equipment.

          The only surprise to me in Nikon’s financials is that they exceeded their projections. I expected them to meet them. I don’t think the whisper numbers actually happened until the very last minute this time, if at all.

      • What you suggest is just as illegal in Japan as it is in the US.

        However, I’m really surprised no one picked up on what I reported a while back: many Japanese firms restated forecasts in the period after the quake but before year-end results were announced. Nikon did not (historically they’ve been very good at about previewing “down” results). What that said to me was that Nikon was expected to meet or exceed 4th quarter results, despite having the final month disrupted by the earthquake.

        There’s another little tidbit that isn’t generally known: Nikon doesn’t do much shipping/selling in the final week of a quarter/year. They do inventory instead. So Nikon would have probably only lost about a week of shipments in the quarter due to the quake.

        I think much of the rise on the stock after the earnings were announced is actually due to the forward advise: Nikon seems to be saying that despite whatever’s been going on since March 11th, that they’re reasonably comfortable that they’ll have flat or up results moving forward. Given that they have until August before any D400/D800/D4 revenues would have been realized, that seems to suggest that the Coolpix/D3100/D5100/D7000 sales are likely to continue as they have. That surprised me a little, as I’m aware of several parts that are tight for those products and they’ve not yet really met the D7000 demand.

        • Just A Thought

          “What you suggest is just as illegal in Japan as it is in the US.”

          So is driving over the speed limit. Does that stop anyone? Unless you really overdo things, what are the odds of getting caught? If you get caught, just pay the fine but “never admit guilt” and repeat again next earnings season. Besides you can write the fine off as a cost of doing business.

          May not happen in Japan with their additional cultural taboos about losing face if caught with your hand in the cookie jar.

  • broxibear

    amateur photographer magazine are reporting the earthquake cost Nikon more than £17m…
    “The camera giant posted an ‘extraordinary loss’ of 2,313 million yen (£17.6m) in its accounts for the year ended 31 March.
    The firm said the loss caused by the 11 March disaster ‘includes expenses to restore the inventories to original state of 615 million yen and losses on abandonment and valuation of 237 million yen’. ”

    • Just A Thought

      “losses on abandonment”

      Can anyone clarify what was abandoned??

      • broxibear

        I don’t know, but if Nikon have any “abandoned” D3s bodies or prime f1.4Gs that need a loving home I can help, they can come and live with me lol.

        • Somewhat doubtful that much if any near finished product was abandoned. But consider exotic telephoto glass (300mm, 400mm, 500mm, 600mm). From start to finish, that glass takes as much as a year to pour, cure, polish, and coat. I’m pretty sure they lost some glass due to the quake. It’s also possible that there was some product in containers at the Sendai docks when the tsunami hit.

      • Jabs

        @Just A Thought.
        Losses of abandonment probably refers to items destroyed by the earthquake and tsunami – sort of like a chargeback for items lost, destroyed or unrepairable. It could be equipment, cameras, lenses, production gear, damaged stock and such. Nikon was not specific, so I have to guess.

        • Just A Thought

          Thanks Jabs. Nikon Rumors should contact Nikon and maybe setup a new giveaway of some of the gear Nikon abandonded … BROXIBEAR gets first divs on some gear. Could make for interesting Collector Items. Wonder if Nikon could still write it off if they gave it away???

          • I am aways open for new giveaways, if Nikon is reading this 🙂

            BTW, I will will have a nice giveaway on PhotoRumors in the next few days:


          • Jabs

            @Just A Thought.
            Normally in Business, your inventory, your Production and even partially completed items are covered by Insurance and they often stipulate that things need to be sold for salvage BUT in the case of Nikon, they probably crushed the products themselves, as perhaps they were in the process of manufacturing unreleased bodies and or lenses, so they could not announce what was destroyed or the exact details of their losses from the earthquake/tsunami or even let their prototypes or unannounced bodies/lenses out of their Factories. Think of possible D4’s, D800’s and exotic newly developed or already announced lenses as prime suspects along with maybe some D3X’s, D3S’s and even D700’s FX bodies as maybe casualties. There also is loss of Production capability clauses or even Business Disruption/Natural Disaster/Acts of War clauses that are insured, so Nikon is being closemouthed about what was lost for strategic Business purposes.
            Don’t cry about all these lost photo equipment as it won’t matter now and NO, they cannot sell, give away nor redistribute the equipment that was partially or directly destroyed. Sort of like what happened in the US when Hurricanes hit New Orleans and destroyed many Car Dealerships and they could no longer sell them as new cars, even though some unscrupulous people later sold these auctioned and salvaged disguised flood cars later to naive buyers illegally. Nikon lost lots of Products, it seems but eventually either through Government subsidies, Insurance or Business loss adjustments, they will recoup their losses but not in time to include these in the fiscal year ended now. All the salvage yards or businesses in Japan would now be the greatest source of information/rumors as to what each manufacturer had been up to at the time, if they did not destroy their damaged goods.

  • rhlpetrus

    Thom and Admin:

    these figures together with a recent report that stated that Nikon had had about 30% of dslr market share (units) indicate that the dslr maket was about 14.3 million units last year, something I find hard to believe. Maybe it included mirrorless bodies as well.

    Any of you know the figures for the other makers, like Canon, Sony, etc?


    • no, if I find some stats I will let you know

  • Jabs

    Hey Administrator,
    If you post articles via a browser, then using Firefox 4.01 can solve your spelling errors easily as it has a built-in spell checker. It also is available for IPhones too.

  • Jabs

    Here is a look at the Nikon Sendai Plant – post earthquake/tsunami.

    • Rob

      You mean PRE-earthquake/tsunami.

      • Jabs

        Sorry – my mistake.
        It should have been PRE-earthquake.

  • Hendog

    Somehow I reckon the D800 is going to be in way too much demand by the time it comes out… Might have to make a pre order for a pre order. It’ll be interesting to see how supply keeps up with that one.

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