“Display manufacturers have postponed their investment in OLED (organic light emitting diode) screens as the OLED investment boom has temporarily slowed down,” Chief Financial Officer Toshizo Tanaka said at an earnings briefing.

The revision comes as slower-than-expected sales of OLED smartphones, including Apple Inc’s high-end iPhone X, have made Samsung Electronics Co Ltd and other panel manufacturers cautious about fresh OLED investment.

Canon, which also produces cameras and printers, cut its annual operating profit forecast for the year ending in December to 378.5 billion yen (RM13.9 billion) from 404 billion yen (RM14.9 billion).

The revised outlook compared with a consensus estimate of 388.64 billion yen (RM14.26 billion) from 18 analysts, according to Thomson Reuters I/B/E/S.

Several analysts recently cut their investment ratings on Canon, citing lower potential to cut costs, a slowdown in demand for panel display equipment from Chinese and Korean manufacturers and tougher competition in camera and printer businesses.

Cost savings and acquisitions have been helping Canon to make up for shrinking demand for compact cameras and slowing growth in copiers and printers, but the analysts said the next catalyst for growth may take quite a while to emerge.

“We would need to see an expansion of the business portfolio through the execution of sizable and effective M&A in order to take a more constructive investment stance on the stock,” Goldman Sachs analyst Satoru Ogawa said in a report this month.

“However, Canon’s M&A budget for the next three years suggests a slowdown in the pace of investment.”

Reflecting uncertainties over the outlook, Canon shares have fallenabout 20% since its recent peak marked in early February.

For the three months through June, Canon reported operating profit of 97.96 billion yen (RM3.59 billion), up 4.4% from a year-before profit of 93.83 billion yen (RM3.44 billion).

The result missed the 99.53-billion-yen (RM3.65 billion) average of five analyst estimates.