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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of March 31, 2003

30-2, Shimomaruko 3-Chome, Ohta-ku, Tokyo 146-8501, Japan

[Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F    X     Form 40-F           

[Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes            No      X     

[If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-              

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

* Print the name and title of the signing officer under his signature.

The following materials are included.

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CONSOLIDATED RESULTS FOR
THE FIRST QUARTER ENDED MARCH 31, 2003

April 30, 2003

CONSOLIDATED RESULTS

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Operating Results and Financial Conditions

2003 First Quarter in Review

Looking back at the global economy in the first quarter of 2003, in the United States, a recovery in employment conditions failed to materialize, depressing consumer confidence and weakening the potential for an economic recovery. In Japan, amid a continued high unemployment rate, consumer spending remained flat and the economy showed no signs of a recovery. Economies in Europe, particularly those of Germany and France, also decelerated due to weakened domestic demand from stagnant consumer spending. Asian economies, such as those of China, Korea and Thailand, showed steady growth, reflecting a healthy increase in domestic demand.

As for the markets in which the Canon Group operates, flagging demand for personal computers resulted in reduced sales of printers and other IT-related equipment while sales of color and multifunction copying machines were strong within the corporate-use digital copier market. The digital camera market continued to show robust growth, especially in overseas markets, supported by healthy demand. In the field of semiconductor-production equipment, chip manufacturers maintained restrained capital spending amid continued price declines in the memory device market due to sluggish demand for personal computers. The average value of the yen for the quarter was ¥118.92 to the U.S. dollar and ¥127.72 to the euro, representing a year-on-year increase of 11% against the U.S. dollar, and decrease of 9% against the euro.

Amid these conditions, Canon’s consolidated net sales increased by 12.4% from the year-ago period to ¥731.6 billion (U.S.$6,096 million), boosted by a recovery in sales of laser beam printers, which had suffered a large drop in the first quarter of the previous year due to inventory adjustment by our OEM partner, and semiconductor-production equipment, along with a significant rise in sales of digital cameras. On a quarterly basis, net income recorded an all-time high of ¥71.6 billion (U.S.$597 million), a year-on-year increase of 126.2%. The gross profit ratio for the quarter was 50.7%, surpassing the 50% mark for the first time ever, representing an improvement of 3.6% from 47.1% a year ago. This achievement was made possible through the company’s R&D reformation activities, which have supported the timely launch of competitive new products, and cost savings realized through sustained production reforms. Selling, general and administrative expenses rose 4.8% year on year for the first quarter as R&D expenditures increased by ¥4.9 billion (U.S.$41 million) to ¥53.8 billion (U.S.$449 million). While R&D expenses during the quarter grew along with increases in sales-promotion spending, selling, general and administrative expenses overall rose only 4.8% from the same period of the year before, less than the growth rate of net sales for the quarter. Consequently, operating profit in the first quarter totaled ¥117.4 billion (U.S.$978 million), a substantial increase of 81.9%. Non-operating income and expenses improved by ¥2.3 billion (U.S.$19 million) through reduced currency exchange losses and equity losses of affiliated companies. As a result, income before income taxes in the first quarter totaled ¥117.2 billion (U.S.$977 million), a year-on-year increase of 89.0%. At the end of March 2003, an amendment to the Japanese tax regulations was announced that will introduce added value component and capital component standard to a portion of enterprise tax. As a result, the standard Japanese income tax rate will be reduced from the 2005 fiscal year. Although tax expenses increased temporarily following a reassessment of deferred tax assets and liabilities as a result of this amendment, with the tax credit for increased R&D expenses as well as the solid achievements by foreign subsidiaries, the effective tax rate during the quarter decreased by 8.5% compared to the previous year. Consequently, net income in the first quarter of 2003 totaled ¥71.6 billion (U.S.$597 million), a year-on-year increase of 126.2%.

Basic net income per share for the quarter was ¥81.6 (U.S.$0.68), a year-on-year increase of ¥45.5.

Results by Product Segment

In the business machine segment, Canon’s powerful imageRUNNER-series lineup of digital networked black-and-white multifunction copying machines realized healthy sales growth worldwide. In particular, the mid-range iR2200/iR3300 models, and high-end iR5000 and iR7200/iR105 models continued to record strong sales during the quarter. Among digital networked color copying machines, the iRC3200/iRC3200N, released domestically at the end of the previous year, also contributed to increased sales of office imaging products. Overall, sales of office imaging products for the quarter realized a year-on-year increase of 1.2%. In the field of computer peripherals, sales of laser beam printers, which had dropped significantly during the same period of the previous year due to inventory adjustment by our OEM partner, showed robust growth as a result of a recovery in orders. Sales of Bubble Jet printers, however, despite favorable performances by such newly introduced products as the Canon MultiPASS series of multifunctional ink-jet printers and the notebook-model Canon Bubble Jet Printer i70, dipped slightly, reflecting the stagnant market demand for personal computers. As a result, sales of computer peripherals in the first quarter

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increased by 17.5%. Sales of business information products, including computers, micrographics and calculators, decreased by 19.9% due to declining domestic personal computer sales. Consequently, sales of business machines overall totaled ¥551.5 billion (U.S.$4,596 million), a 6.6% increase year on year for the first quarter. Cost-cutting measures and the introduction of new price competitive products have contributed to a 6.4% improvement in the operating profit margin for the period while operating profit for the quarter totaled ¥123.4 billion (U.S.$1,028 million), a year-on-year increase of 49.4%, reflecting a substantial increase in sales volume for laser beam printers. Beginning this quarter, Canon has updated the breakdown of product categories comprising the business machines segment to better reflect present sales conditions. Accordingly, previous-year sales for each category have been restated in accordance with the changes.

Within the camera segment, amid the continued strong demand for digital models worldwide, Canon launched in the second half of last year several new compact digital cameras, including the PowerShot G3, PowerShot S45, and PowerShot S230 Digital ELPH, which have contributed to a significant increase in sales. The company’s digital SLR models were also well received by the market, namely the EOS-1Ds, launched last year, and EOS 10D, which was introduced during the this term. Sales of conventional film cameras, however, continued to slip during the quarter amid the increasing popularity of digital models and price competition. Sales of digital video camcorders were healthy with the introduction of such new products as the mega-pixel model FV M10 contributing to a strong product lineup. As a result, camera sales overall continued to achieve double-digit growth of 37.1% during the first quarter to ¥117.5 billion (U.S.$980 million). Operating profit for the camera segment appreciably advanced 102.6% to ¥21.7 billion (U.S.$181 million), attributable to the rapid growth in sales of digital cameras and digital video camcorders.

In the optical and other products segment, despite the continued restrained capital spending by memory device manufacturers during the quarter, sales increased by 30.2% to ¥62.5 billion (U.S.$521 million), boosted by a substantial increase in sales of aligners for the production of liquid crystal displays. Optical and other products recorded an operating profit of ¥1.8 billion (U.S.$15 million) in the first quarter of 2003, compared with operating losses of ¥4.5 billion for the corresponding period from the previous year.

Cash Flow

In the first quarter of 2003, Canon maintained cash flow from operating activities of ¥97.1 billion (U.S.$809 million), a year-on-year first quarter increase of ¥24.8 billion (U.S.$207 million), reflecting the substantial increase in net income as well as an increase in depreciation expenses and efforts to reduce working capital. Capital expenditure totaled ¥40.7 billion (U.S.$339 million), which was used mainly to expand production capabilities in both domestic and overseas regions. Cash flow from investing activities totaled ¥54.8 billion (U.S.$456 million), including a ¥12.7 billion (U.S.$106 million) outlay for the acquisition of Sumitomo Metal System Solution Co. Ltd., now Canon System Solution Inc. As a result, free cash flow, or cash flow from operating activities minus cash flow from investing activities, totaled positive ¥42.3 billion (U.S.$353 million).

Cash flow from financing activities recorded an outlay of ¥37.5 billion (U.S.$313 million), mainly resulting from active efforts to repay short-term loans toward the goal of improving the company’s financial position. Consequently, Cash and cash equivalents, which totaled ¥530.8 billion (U.S.$4,423 million), remained at a high level, representing a ¥9.5 billion (U.S.$79 million) increase from the end of the previous year.

Outlook

Regarding the outlook for the global economy in the second quarter and thereafter, while military operations in Iraq are expected to be completed in a relatively short period of time, the future direction of the global economy remains uncertain as anxiety mounts over the looming financial burden posed by the reconstruction of Iraq and fear of future terror attacks which could trigger a further decline in consumer spending. Furthermore, the spread of the Severe Acute Respiratory Syndrome (SARS) virus, primarily throughout China, could result in production difficulties in the region and poses a serious threat to the economies of China and Southeast Asia should the epidemic negatively impact the tourism trade or exports.

In the businesses in which Canon is involved, the digital camera market is expected to continue enjoying rapid growth. A shortage of key parts from suppliers, however, could have a restraining effect on market growth. As for copying machines and laser beam printers, while stable demand is projected for full-color models, capital spending in the private sector could decline in the slumping economy. Within the semiconductor-production equipment market, a recovery in capital investment by memory device manufacturers is taking longer than was originally anticipated and orders are now expected to show signs of a turnaround sometime after next year.

Although uncertainty surrounds several factors that could affect currency exchange rates, significant changes in rates are not anticipated. The yen is expected to be slightly stronger against the U.S. dollar and weaker against the euro than during the previous year.

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Upon considering the current market and currency exchange environments, the company has revised upward its forecasts for the 2003 fiscal year and now anticipates consolidated net sales of ¥3,152.0 billion (U.S.$26,267 million), consolidated income before income taxes of ¥410.0 billion (U.S.$3,417 million), and consolidated net income of ¥240.0 billion (U.S.$2,000 million). The company also projects non-consolidated net sales of ¥1,947.0 billion (U.S.$16,225 million), non-consolidated ordinary profit of ¥305.0 billion (U.S.$2,542 million), and non-consolidated net income of ¥220.0 billion (U.S.$1,833 million). These forecasts assume currency exchange rates of ¥118.00 to the U.S. dollar and ¥125.00 to the euro for the remainder of 2003.

Consolidated Outlook
1st Half

Fiscal year

Non-consolidated Outlook
1st Half

Fiscal year

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED