By Thomas Wilson
TOKYO (Reuters) - Japan's Canon Inc hiked its annual profit forecast for the third time on Tuesday on the back of expanding demand for "business-to-business" products from surveillance cameras to organic light-emitting diode (OLED) screen production equipment.
Canon, which also makes copiers and printers, forecast operating profit to soar by more than half to 350 billion yen ($3 billion) for the year through December as capital expenditure by manufacturers grows.
Coupled with a doubling of operating profit in the third-quarter, the upbeat outlook - which surpassed analysts' estimates - suggests Canon's diversification from a global camera market under attack from increasingly sophisticated smartphones is paying off.
Imaging industry peers from Fujifilm Holdings Corp to Konica Minolta Inc have taken a similar approach, looking to spend on mergers and acquisitions to move further beyond their traditional businesses.
Late last year Canon bought CT scanner and ultrasound equipment maker Toshiba Medical Systems from Toshiba Corp.
In 2015 it bought Swedish video surveillance firm AXIS for $2.8 billion, a move which helped Canon reach the top of the video surveillance market.
Demand for medical devices and network cameras - devices housing a lens, image sensor and processor in one unit - helped Canon's third-quarter operating profit more than double to 80.5 billion yen versus a year earlier even as demand for consumer cameras and printers shrank or remained flat.
Canon said it was helped by a weaker yen in the third quarter, when the Japanese currency averaged 110.93 against the U.S. dollar - a year-on-year drop of around nine yen.
Foreign sales accounted for almost four-fifths of Canon's total revenue in the first nine months of the year, with the United States - its biggest market - accounting for over a quarter.
(Reporting by Thomas Wilson; Editing by Christopher Cushing)