Fujitsu Limited, a leading provider of IT-based business solutions for the global marketplace, today reported a consolidated operating income of 204.9 billion yen (US$2,049 million*) for fiscal 2007 (April 1, 2007 – March 31, 2008), an increase of 12.6% over the previous year. The increase in operating income was primarily attributable to sharply higher sales of solutions/SI, servers, PCs and mobile phones as well as the success of cost control initiatives throughout the Fujitsu Group.
In the Technology Solutions segment, operating income in the System Platforms sub-segment rose fivefold on strong global demand for UNIX and PC servers. Income from the Ubiquitous Product Solutions segment soared 26.2% on brisk sales of PCs worldwide, along with continued strong sales of mobile phones in Japan.
Consolidated net income totaled 48.1 billion yen (US$481 million), a decrease of 54.3 billion yen from a year earlier, although prior year comparisons were affected by one-time gains from the sale of marketable securities posted in fiscal 2006 and a one-time loss posted in fiscal 2007. On an operational basis, the company made further progress building a business structure to deliver a stable stream of profits. Therefore, the company decided to raise the year-end dividend by 2 yen per share, from 3 yen to 5 yen, thereby increasing the annual dividend to 8 yen per share. For fiscal 2008, Fujitsu plans to maintain semiannual dividends at 5 yen, for an annual dividend payment 10 yen a year.
"Fiscal 2007 was a pivotal year in positioning Fujitsu for future growth and profitability,” said Fujitsu Limited President Hiroaki Kurokawa. "Fujitsu delivered solid financial results driven by our Technology Solutions. By further reinforcing our strengths through business structure reform, broadening our offerings from ‘IT solutions’ to ‘business solutions,’ and developing even closer relations with customers, we will strive to meet our medium-term target of increasing operating profit margin to over 5%."
Consolidated net sales totaled 5,330.8 billion yen (US$53,308 million), an increase of 4.5% over the previous fiscal year. The increase in sales was broadly based, with each of Fujitsu’s three business segments reporting year-on-year sales gains. Sales in Japan increased by 3.7%, while sales outside Japan rose 5.5%. Services sales grew 4.3%, rising 2.6% in Japan and 7.5% outside of Japan.
The company posted one-time losses totaling 72.7 billion yen from a decline in the market value of securities holdings, a revaluation loss on inventories resulting from the early adoption of new accounting policies, and relocation and other expenses associated with the restructuring of its LSI device business. The company also posted gains of 19.3 billion yen, primarily from a gain on sale of shares in affiliates.
Business Segment Results
Consolidated net sales in the Technology Solutions segment, which includes the System Platforms and Services sub-segments, rose 3.6%, to 3,272.2 billion yen (US$32,722 million). Sales in Japan increased by 0.7%, as higher sales of system integration and outsourcing services outweighed lower sales of mobile phone base stations. Sales outside of Japan increased by 9.4% on higher Services sales, boosted in part by acquisitions, as well as higher sales of servers and optical transmission systems. Operating income for the segment was 180.1 billion yen (US$1,801 million), up 16.5 billion yen over the previous year as a result of higher sales and improved cost efficiencies in the server and Services businesses.
Net sales in the Ubiquitous Product Solutions segment, which includes PCs, mobile phones, HDDs and other products, were 1,188.9 billion yen (US$11,889 million), an increase of 6.3% over fiscal 2006. Sales in Japan rose by 7.2% on higher sales of PCs and mobile phones. Sales outside Japan increased by 4.8% on robust demand for notebook PCs, mainly in North America and Asia, and strong sales of HDDs, where unit sales hit a new record. Operating income for the segment was 52.5 billion yen (US$525 million), an increase of 10.9 billion yen over the prior fiscal year, primarily the result of higher PC sales and success in reducing costs.
Net sales in the Device Solutions segment increased 4.5%, to 796.7 billion yen (US$7,967 million). Sales in Japan rose by 14.1%, driven by higher sales of 90nm advanced LSI devices. Sales outside of Japan declined by 9.9%, primarily reflecting the realignment in the sales organization for Flash memory products used in mobile phones. Despite improved sales of advanced technology logic devices, operating income was 18.2 billion yen (US$182 million), down 0.7 billion yen, affected by higher amortization of capital expenditures.
Fiscal 2008 Projections
For fiscal 2008 (April 1, 2008 – March 31, 2009) Fujitsu is projecting essentially flat consolidated net sales of 5,350.0 billion yen, as growth in the company’s Services and HDD businesses is expected to be offset by a decline in the yen value of sales outside of Japan as a result of the appreciation of the yen. The company is projecting solid growth of 7.3% in operating income and a sharp rebound in net income, to 100 billion yen. The company's earnings projections for fiscal 2008 are presented below:
|FY 2007 (Actual)||FY 2008 (Forecast)||Change|
Complete information on Fujitsu's fiscal 2007 financial results, including financial tables, explanation of results and supplementary information, may be found at: http://www.fujitsu.com/about/ir/
* All yen figures have been converted to U.S. dollars for convenience only at a uniform rate of US$1 = 100 yen, the approximate closing exchange rate on March 31, 2008.
Note: These materials may contain forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results may differ materially from those projected or implied in the forward-looking statements due to, without limitation, the following factors:
- General economic and market conditions in key markets (particularly in Japan, North America, Europe and Asia, including China)
- Rapid changes in the high-technology market (particularly semiconductors, PCs, etc.)
- Fluctuations in exchange rates or interest rates
- Fluctuations in capital markets
- Intensifying price competition
- Changes in market positioning due to competition in R&D
- Changes in the environment for the procurement of parts and components
- Changes in competitive relationships relating to collaborations, alliances and technical provisions
- Potential emergence of unprofitable projects
- Changes in accounting policies
Fujitsu is a leading provider of IT-based business solutions for the global marketplace. With approximately 160,000 employees supporting customers in 70 countries, Fujitsu combines a worldwide corps of systems and services experts with highly reliable computing and communications products and advanced microelectronics to deliver added value to customers. Headquartered in Tokyo, Fujitsu Limited (TSE:6702) reported consolidated revenues of 5.3 trillion yen (US$53 billion) for the fiscal year ended March 31, 2008. For more information, please see: www.fujitsu.com.
Company and product names referenced 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: 12 May, 2008
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