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Fujitsu Reports Fiscal 2015 First-Quarter Financial Results

Fujitsu Limited

Tokyo, July 30, 2015

Fujitsu today reported a loss for the first quarter attributable to owners of the parent of 18.9 billion yen, representing a deterioration of 25.7 billion yen from the first quarter of fiscal 2014. Although first-quarter projections were not publicly disclosed at the announcement of the full year results of fiscal 2014, the first-quarter results are in line with original expectations. Furthermore, the annual projections for fiscal 2015 remain unchanged.

Consolidated revenue for the first quarter of fiscal 2015 was 1,065.0 billion yen, essentially unchanged from the first quarter of fiscal 2014. Revenue in Japan declined 3.1%. Although revenue from system integration services and server-related revenue increased, revenue from network products and PCs decreased. Although revenue from network products in North America and PCs in Europe declined, revenue outside of Japan rose 3.6%, benefitting from foreign exchange translation.

Fujitsu recorded an operating loss of 27.3 billion yen, representing a deterioration of 34.6 billion yen from the first quarter of fiscal 2014. There was the negative impact of higher procurement costs in Europe for US dollar-denominated components stemming from the weakening of the euro against the US dollar, and there were one-time expenses recorded to cover the reallocation of employees and related costs in the network business in Japan.

Net financial income was 1.8 billion yen, an increase of 0.7 billion yen from the same period in fiscal 2014 resulting primarily from a net gain on foreign exchange.

Income from investments accounted for using the equity method, net, was 8.6 billion yen, an increase of 6.5 billion yen from the first quarter of fiscal 2014, mainly for a device-related affiliate in China and a system LSI design and development affiliate.

As a result, the loss before income taxes was 16.8 billion yen, representing a deterioration of 27.2 billion yen from the first quarter of the previous fiscal year.

The loss for the period attributable to owners of the parent was 18.9 billion yen, representing a deterioration of 25.7 billion yen from the first quarter of fiscal 2014.

Comment from President Tatsuya Tanaka

Fujitsu's hardware business in and outside Japan has, as expected, experienced regrettable results in the first quarter. This was due to the anticipated depreciation of the euro against the US dollar and decreased investments by telecommunications carriers in Japan and other markets around the world. However, with devices benefitting from the weakened yen, brisk services business in Japan, and further measures being implemented from the second quarter to enhance business, Fujitsu is actively working toward meeting its projection of an operating profit of 150 billion yen for fiscal 2015.

Business Segment Financial Results for the First Quarter

Revenue in the Technology Solutions segment amounted to 718.8 billion yen, an increase of 1.5% from the first quarter of fiscal 2014. In the Services sub-segment, revenue from system integration services rose on higher spending by customers in the public sector and financial services sector. In the System Platforms sub-segment, however, revenue from mobile phone base stations, optical transmissions systems, and other network products declined. The segment posted an operating loss of 4.0 billion yen (US$33 million), representing a deterioration of 15.4 billion yen compared to the same period in fiscal 2014. Despite the positive impact of higher sales in the Services sub-segment, operating profit declined because of higher expenses to expand sales in the company's internet service provider business, among other factors. In the System Platforms sub-segment, operating profit declined because of lower revenue and one-time expenses of approximately 5.0 billion yen to cover the reallocation of employees and related costs in the network business in Japan.

Revenue in the Ubiquitous Solutions segment was 243.2 billion yen, down 9.5% from the first quarter of fiscal 2014. For PCs, revenue declined as the cycle of higher demand for upgrades resulting from the ending of support for an operating system had peaked in the first quarter of the prior fiscal year. Revenue from the Mobilewear sub-segment increased, primarily in Europe and Asia, and results also benefited from foreign exchange translation. The Ubiquitous Solutions segment posted an operating loss of 7.6 billion yen, a deterioration of 16.3 billion yen compared to the same period in fiscal 2014.

Revenue in the Device Solutions segment amounted to 149.9 billion yen, up 10.9% from the first quarter of fiscal 2014. Also, revenue from LSI devices increased, primarily from devices used in smartphones. Revenue from both LSI devices and electronic components benefited from foreign exchange movements. The segment posted an operating profit of 10.7 billion yen, up 7.3 billion yen from the first quarter of fiscal 2014.

The Other/Elimination and Corporate segment recorded an operating loss of 26.3 billion yen, representing a deterioration of 10.1 billion yen from the first quarter of fiscal 2014. The higher loss is attributable to an expansion of strategic investments in such fields as next-generation clouds as IoT* usage platforms and future healthcare services.

* IoT (Internet of Things): A system in which, in addition to PCs and servers, for example, a wide variety of things are connected to the Internet and exchange information.

About Fujitsu

Fujitsu is the leading Japanese information and communication technology (ICT) company, offering a full range of technology products, solutions, and services. Approximately 159,000 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 4.8 trillion yen (US$40 billion) for the fiscal year ended March 31, 2015. For more information, please see http://www.fujitsu.com.

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All 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: 30 July, 2015
City: Tokyo
Company: Fujitsu Limited