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Fujitsu Reports Fiscal 2011 Third-Quarter Financial Results

- Profit up in Technology Solutions segment, although Thai floods hurt results in Ubiquitous Solutions and Device Solutions segments-

Fujitsu Limited

Tokyo, January 31, 2012

Fujitsu today reported a consolidated net loss of 4.3 billion yen (US$55 million) for the third quarter of fiscal 2011 (October 1 to December 31, 2011), representing a deterioration of 20.8 billion yen from the corresponding period of fiscal 2010. The impact of the Thai floods reduced net sales by 34.0 billion yen and operating income by 14.0 billion yen in the third quarter.

Third-quarter net sales totaled 1,079.7 billion yen (US$13,842 million), down 1.5% from the corresponding period of the previous fiscal year. In Japan, sales rose by 3.8%. Sales of mobile phones, car audio and navigation systems, and LSI devices were negatively affected by delays in procuring parts, as well as by associated customer-side production adjustments, as a result of the floods in Thailand. In addition, sales of LSI devices and electronic components were hit by weak demand. The spreading popularity of smartphones, however, boosted sales of networking equipment, such as mobile phone base stations, and sales of mobile phones, enabling overall sales in Japan to rise. Sales outside of Japan declined by 10.7%, and on a constant-currency basis sales fell by 5%. Sales of infrastructure services and server-related sales declined, primarily in the US and Europe. In addition, US sales of optical transmission systems, which had been strong, were adversely affected by a temporary pullback in spending on the part of carriers.

Fujitsu recorded operating income of 3.1 billion yen (US$40 million), representing a deterioration of 18.1 billion yen compared to the third quarter of fiscal 2010. Progress has been made in achieving cost efficiencies throughout the group, although operating income declined due to a fall in sales resulting from the flooding in Thailand, the subsequent surge in prices of hard disk drives and other components, and the decline in sales of LSI devices and electronic components.

Fujitsu recorded 2.7 billion yen in restructuring expenses, reflecting a portion of the expenses incurred during the third quarter stemming from the decision to reorganize its Japan production operations of its car audio and navigation systems business, as well as expenses related to the streamlining of services businesses, mainly in Europe. In addition, deferred tax expenses increased, as tax code revisions lowered the effective tax rate.

Full-year financial projections have been revised downward in light of delays in a recovery in ICT spending inside and outside Japan, the impact of last October's floods in Thailand, and lower demand for semiconductors and electronic components.

“We are making solid progress in growing our cloud-related business and improving the profitability of our overseas ICT business," commented Masami Yamamoto, President of Fujitsu. “Losses from the Thai floods and from lower-than-expected market demand, however, forced us to revise our projections downward. Going forward, we will continue to pursue aggressive reforms to further develop a business structure that can better withstand fluctuations in the business environment."

Business Segment Results

Consolidated net sales in the Technology Solutions segment amounted to 686.1 billion yen (US$8,796 million), down 4.5% from the third quarter of fiscal 2010. Sales in Japan were on par with the same period of the previous fiscal year. Sales outside Japan declined 11.3%. Excluding the impact of exchange rate fluctuations, sales decreased by 6%. The segment posted operating income of 25.9 billion yen (US$332 million), an increase of 0.9 billion yen compared to the third quarter of fiscal 2010. Outside Japan, operating income increased as the result of improved profitability in the European services business.

Net sales in the Ubiquitous Solutions segment were 301.1 billion yen (US$3,860 million), an increase of 4% compared to the same period in fiscal 2010. Sales in Japan increased 8.9%. Sales outside Japan declined 9.9%, and by 4% on a constant-currency basis. Operating income for Ubiquitous Solutions was 2.0 billion yen (US$26 million), a decline of 1.6 billion yen from the same period of fiscal 2010.

Net sales in Device Solutions amounted to 138.1 billion yen (US$1,771 million), a decline of 11.1% compared to the third quarter of fiscal 2010. Sales in Japan declined 12.1%. Sales outside Japan declined 9.5%. Excluding the impact of exchange rate fluctuations, sales declined 4%. The segment recorded an operating loss of 8.4 billion yen (US$108 million), a deterioration of 16.8 billion yen from the third quarter of fiscal 2010.

Fiscal 2011 Consolidated Projections

In light of the impact of the Thai floods and delays in the rebound of ICT spending inside and outside Japan, Fujitsu has made downward adjustments to its full-year financial projections for fiscal 2011, as presented below.

Revised Projections
(Billion Yen)
  FY 2011 Projections
(Full-Year)
Change from Projections
Announced in October
Net Sales 4,490.0 -50.0
Operating Income 100.0 -35.0
Net Income 35.0 -25.0

* All yen figures have been converted to U.S. dollars, for convenience only, at a uniform rate of US$1 = 78 yen, the approximate closing rate on December 31, 2011.

About Fujitsu

Fujitsu is the leading Japanese information and communication technology (ICT) company offering a full range of technology products, solutions and services. Over 170,000 Fujitsu people support customers in more than 100 countries. We use our experience and the power of ICT to shape the future of society with our customers. Fujitsu Limited (TSE:6702) reported consolidated revenues of 4.5 trillion yen (US$55 billion) for the fiscal year ended March 31, 2011. For more information, please see http://www.fujitsu.com

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All other company or product names mentioned herein are trademarks or registered trademarks of their respective owners. Information provided in this press release is accurate at time of publication and is subject to change without advance notice.

Date: 31 January, 2012
City: Tokyo
Company: Fujitsu Limited, , , , , , , , , ,