Canon Inc. Reports Results for First Half 2005.

LAKE SUCCESS, N.Y. -- Canon U.S.A., Inc., a subsidiary of Canon Inc. (NYSE: CAJ) and a leader in imaging technologies, today 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.

Mr. 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."

For more detailed information and tables, please refer to our Announcement of First Half 2005 financial results at http://www.canon.com/ir/index.html.

About Canon U.S.A., Inc.

Canon U.S.A., Inc. delivers consumer, business-to-business, and industrial imaging solutions. The Company is listed as one of Fortune's Most Admired Companies in America and is rated #35 on the BusinessWeek list of "Top 100 Brands." Its parent company Canon Inc. (NYSE:CAJ) is a top patent holder of technology, ranking third overall in the U.S. in 2004, with global revenues of $33.3 billion. For more information, visit www.usa.canon.com.

This release may contain forward-looking statements with respect to future results, performance and achievements that are subject to risk and uncertainties and reflect management's views and assumptions formed by available information. All statements other than statements of historical fact are statements that could be considered forward-looking statements. When used in this release, words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "project" or "should" and similar expressions, as they relate to Canon, are intended to identify forward-looking statements.

Many factors could cause the actual results, performance or achievements of Canon to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptance of new products or services by Canon's targeted customers, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, both referenced and not referenced in this release. A detailed description of these and other risk factors is included in Canon's annual report on Form 20-F, which is on file with the United States Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. Canon does not intend or assume any obligation to update these forward-looking statements.

Note: In this release, U.S. dollar amounts are translated from yen at the rate of US$ = JPY111, the approximate exchange rate on the Tokyo Foreign Exchange Market as of June 30, 2005, solely for the convenience of the reader.