Canon cuts forecast, sees 1st profit fall in 9 yrs

* Q3 profit down on firmer yen, slow copier, camera sales

* Cuts 2008 oper profit outlook 25%, sees first fall in 9 yrs

* Profit may fall again in 2009 if yen stays firm (Adds analyst comments, details, link to graphic)

By Kiyoshi Takenaka

TOKYO, Oct 27 (Reuters) - Japan's Canon Inc posted a 26 percent drop in quarterly operating profit and cut its annual outlook, predicting its first fall in nine years as the global downturn drives up the yen and hurts copier and camera sales.

The yen on Monday traded much firmer against the euro and the dollar than Canon's assumptions for October-December, raising concern that the company may miss its latest 2008 outlook and head into another year of profit declines next year.

Canon's downward revision, its second for the year, was widely expected after Sony Corp last week lowered its annual operating profit forecast by 57 percent, citing a stronger yen and slower sales of flat TVs and digital cameras.

Canon is the world's largest digital camera maker ahead of Sony and Nikon Corp.

"The economic slowdown we are facing is something that comes along once in 50 years or once a century. It is beyond what any one single company can deal with on its own," Canon Managing Director Masahiro Osawa told a group of reporters.

"Our basic stance now is we hone our corporate strength, so we will be running ahead of competition when the economic recovery comes."

Canon cut its operating profit forecast for 2008 by a quarter to 580 billion yen (.18 billion), down from 756.67 billion yen a year earlier and below the market consensus of 693 billion yen from 19 analysts polled by Reuters Estimates.