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Fujitsu Reports Fiscal 2008 First-Quarter Financial Results

- Operating income doubles as growth in services continues -

Fujitsu Limited

Tokyo, July 31, 2008

Fujitsu Limited, a leading provider of IT-based business solutions for the global marketplace, today reported consolidated operating income of 5.8 billion yen (US$55 million*) for the first quarter of fiscal 2008 (April 1 – June 30, 2008), nearly double the previous year's first-quarter result on strong growth in the IT services business.

Consolidated net income totaled 0.3 billion yen (US$3 million), compared with a net loss of 14.7 billion yen in last year's first quarter when the company booked inventory revaluation losses arising from a change in accounting policies.

Consolidated net sales totaled 1,177.2 billion yen (US$11,106 million), essentially unchanged from the year-earlier period. Excluding the impact of yen appreciation, net sales increased by 5%. Sales in Japan increased by 4.7%, led by higher sales of system integration services, mobile phone base stations and router equipment to telecom carriers. Sales outside Japan declined by 5.2%, primarily a result of yen appreciation.

Both sales and operating income in the first quarter exceeded the company's projections announced in May 2008.

"I am very pleased that we remain on target to meet our fiscal 2008 projections, despite growing economic uncertainty," said Fujitsu Limited President Kuniaki Nozoe. "Companies need to improve their business processes on a continual basis in order to succeed in a more competitive business environment, and we are committed to driving innovation in our own business as well as the businesses of our customers to enable them to thrive globally."

Business Segment Results

Consolidated net sales in the Technology Solutions segment, which includes the System Platforms and Services sub-segments, rose 2.2%, to 697.9 billion yen (US$6,584 million). Sales in Japan increased by 8.1%, primarily on higher sales of system integration services, mobile phone base stations and router equipment to telecom carriers. Sales outside Japan decreased by 6.6%. Excluding the impact of yen appreciation, however, sales outside Japan increased by 6% on higher Services sales. Operating income for the segment was 8.2 billion yen (US$77 million), more than double the 3.9 billion yen profit in the previous year's first quarter.

Net sales in the Ubiquitous Product Solutions segment, which includes PCs, mobile phones, HDDs and other products, were 271.8 billion yen (US$2,564 million), a decrease of 1.0% compared to the year-earlier period. Sales in Japan rose by 6.7% on higher sales of PCs, primarily to corporate customers. Sales outside Japan decreased by 14.5% as a result of yen appreciation and intensified competition in Europe's PC market. Operating income for the segment was 9.9 billion yen (US$94 million), a 19.5% decline compared to the previous year.

Net sales in the Device Solutions segment were 172.3 billion yen (US$1,626 million), a decrease of 8.8% from the first quarter of fiscal 2007. Sales in Japan declined by 13.5% on weak sales of standard logic devices. Sales outside Japan were essentially flat. Excluding the impact of yen appreciation, however, sales outside Japan increased by 15% on strong sales of logic products, especially to Asia. The segment posted an operating loss of 4.7 billion yen (US$45 million) compared with a loss of 3.6 billion yen in the previous year's first quarter, primarily due to the lower sales in Japan. An earthquake in the Iwate-Miyagi region of Japan in June also impacted profitability.

Fiscal 2008 Consolidated Projections

Although first-quarter results exceeded the company's projections announced in May, the company has left its first-half and full-year projections for fiscal 2008 unchanged. The company's earnings projections for fiscal 2008 are presented below:

(Billion Yen)
  First Half Full Year
  FY 2007
(Actual)
FY 2008
(Forecast)
Change FY 2007
(Actual)
FY 2008
(Forecast)
Change
Net Sales 2,513.1 2,450.0 -2.5% 5,330.8 5,350.0 0.4%
Operating Income 43.9 35.0 -20.3% 204.9 220.0 7.3%
Net Income -9.3 0 - 48.1 100.0 107.9%

Complete information on Fujitsu's financial results, including financial tables, explanation of results and supplementary information, may be found at:http://www.fujitsu.com/global/about/ir/

* All yen figures have been converted to U.S. dollars for convenience only at a uniform rate of US$1 = 106 yen, the approximate closing exchange rate on June 30, 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

About Fujitsu

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.

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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 July, 2008
City: Tokyo
Company: Fujitsu Limited, , , , ,