Fujitsu Limited, a leading provider of IT-based business solutions for the global marketplace, today reported consolidated net income of 4.6 billion yen (US$44 million*) for the first half of fiscal 2008 ended September 30, 2008, compared with a net loss of 9.3 billion yen in the first half of fiscal 2007. Earnings per share for the period were 2.24 yen, compared to a loss per share of 4.55 yen in the year-earlier period.
Consolidated operating income totaled 38.5 billion yen (US$371 million), a decrease of 12.3% compared to the first half of fiscal 2007, and net sales totaled 2,453.7 billion yen (US$23,594 million), a decline of 2.4%. Excluding the impact of the yen’s appreciation, net sales were on par with the first half of fiscal 2007.
Both first-half operating income and net income exceeded the company's projections announced in July 2008, bolstered by the strong performance in the company’s mainstay Technology Solutions segment, which includes IT services, computing infrastructure and telecommunications platforms. Strong growth in Technology Solutions sales in Japan—particularly system integration services—along with improved cost efficiencies in the segment propped up consolidated profits.
Other product areas, such as PCs, mobile phones, logic LSI devices, and electronic components, were negatively impacted by increasingly severe market conditions, including a general downturn in consumer spending and intensified price competition in the PC and semiconductor markets.
"We beat our projections for the first half despite a very challenging business environment," said Fujitsu Limited President Kuniaki Nozoe. "We are now facing a global economic slowdown, and the entire Fujitsu Group remains committed to driving innovation in our own business as well as the businesses of our customers to improve performance."
Business Segment Results
Consolidated net sales in the Technology Solutions segment, which includes the System Platforms and Services sub-segments, rose 1.2% to 1,524.9 billion yen (US$14,663 million). The 7.4% increase in Japan was driven primarily by higher sales of system integration services, mobile phone base stations and router equipment to telecom carriers. Sales outside Japan decreased by 8.9%. Excluding the impact of yen appreciation, however, sales outside Japan increased by 2% on higher IT services sales. Operating income for the segment was 57.3 billion yen (US$552 million), an increase of 18.6 billion yen over the previous year's first half.
Net sales in the Ubiquitous Product Solutions segment, which includes PCs, mobile phones, HDDs and other products, were 521.4 billion yen (US$5,014 million), a decrease of 9.3% compared to the year-earlier period. Sales in Japan declined by 6.1% on lower sales of PCs and mobile phones. Sales outside Japan decreased by 15.1% as a result of yen appreciation and intensified competition in the hard disk drive market and Europe's PC market. Operating income for the segment was 8.8 billion yen (US$85 million), a decline of 12.9 billion yen compared to the previous year.
Net sales in the Device Solutions segment were 350.9 billion yen (US$3,375 million), a decrease of 11.8% from the first half of fiscal 2007. Sales in Japan declined by 18.2% on weak sales of standard logic devices and 90nm logic devices. Sales outside Japan were flat. Excluding the impact of yen appreciation, however, sales outside Japan increased by 9% on strong sales of logic products, especially to Asia. The segment posted an operating loss of 7.3 billion yen (US$70 million), compared with an operating profit of 6.1 billion yen in the previous year's first half, primarily due to the lower sales in Japan. Earthquakes in the Iwate region of Japan in June and July also impacted profitability.
Fiscal 2008 Consolidated Projections
Although first-half results exceeded the company's projections announced in July, market conditions for mobile phones, PCs, hard disk drives, logic LSI devices, and electronic components have rapidly deteriorated, increasing the uncertainty about sales in the latter half of the year. In addition, due to the recent appreciation of the yen, the company has revised its average foreign currency exchange rates. Due to these and other factors, the company has revised its full-year projections for fiscal 2008 as follows:
|Full-Year Fiscal 2008
July 2008 Forecast
Please see the press release “Fujitsu Revises Earnings Projections for Fiscal 2008” issued today for more detailed information on earnings projections http://www.fujitsu.com/global/about/ir/. Complete information on Fujitsu's financial results, including financial tables, explanation of results and supplementary information, may be found at the same site.
* All yen figures have been converted to U.S. dollars for convenience only at a uniform rate of US$1 = 104 yen, the approximate closing exchange rate on September 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
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.
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: 29 October, 2008
Company: Fujitsu Limited, , , , ,
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