Gross profit shrank 6.3 percent to Yen 499.9 billion (Euro 3.124 billion). Earnings from operations decreased 17.6 percent to Yen 170.8 billion (Euro 1.07 billion), resulting in a net income of Yen 106.6 billion (Euro 666 million), a decline of 18.7 percent against the first quarter 2007. In local currency terms, Canon achieved strong growth, reflecting strong fundamentals, the company said, highlighting that it maintained a high level of profitability despite the current environment and special factors. Camera sales declined 1.6 percent to Yen 219 billion (Euro 1.37 billion), but showed a 4.7 percent increase on local currency base. The operating profit of Canon‘s camera business declined 24.5 percent to Yen 46 billion (Euro 287.5 million). For the full year, Canon expects a further impact of the strong Yen, but a gradual economic recovery towards year-end. The contribution of new products in the second half of the current year and thorough cost and expense reductions are expected to result in the ninth consecutive year of sales and profit growth, the company said.