Canon cut its earnings outlook for the full year and reported a 16 percent fall in quarterly profit as sales of compact digital cameras have stalled. The world's largest camera maker said on Monday its second-quarter net profit fell to 68 billion yen ($552 million) compared with 81 billion yen a year earlier. The firm said it now expects full-year profit of 245 billion yen rather than the 255 billion it forecast three months ago.

"Despite firm sales in Japan, interchangeable-lens digital cameras continued to face severe conditions in other regions while sales volume for digital compact cameras decreased in most regions compared with the same period of the previous year," Canon said in a statement.

Many traditional camera makers are facing slow sales as consumers are taking taking photos with their smartphones.