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Fujitsu Revises Earnings Projections for Fiscal 2008

Fujitsu Limited

Tokyo, October 29, 2008

Fujitsu Limited announced today that it has revised its consolidated earnings projections for fiscal 2008 (ending March 31, 2009), previously announced July 31, 2008.

1. Revised Earnings Projections for FY 2008

(1) Consolidated first-half earnings (April 1, 2008 –September 30, 2008)

(billion yen)
  Net Sales Operating Income Net Income
Previous Projection (A) 2,450.0 35.0 0.0
Actual Results (B) 2,453.7 38.5 4.6
Change (B-A) 3.7 3.5 4.6
Percent Change 0.2 10.1 -
Results for 1H FY 2007 2,513.1 43.9 -9.3

(2) Consolidated full-year earnings projections (April 1, 2008 – March 31, 2009)

(billion yen)
  Net Sales Operating Income Net Income
Previous Projection (A) 5,350.0 220.0 100.0
Current Projection (B) 5,050.0 150.0 60.0
Change (B-A) -300.0 -70.0 -40.0
Percent Change -5.6 -31.8 -40.0
Results for FY 2007 5,330.8 204.9 48.1

2. Reasons for Revisions to Earnings Projections

(1) First-half projection and results

Consolidated net sales totaled 2,453.7 billion yen, largely in line with the projections made July 31, 2008. Though sales of mobile phones, personal computers (PCs), hard disk drives (HDDs) and LSI logic devices declined as a result of lower demand and price competition, IT services sales outpaced projections and the negative impact of currency exchange rates on sales was less than anticipated because of a weaker-than-expected yen.

Operating income totaled 38.5 billion yen, 3.5 billion yen above projections. Despite the impact of lower sales of PCs and HDDs and intensified competition in the logic LSI and electronic component markets, operating income exceeded projections due to cost-reduction efforts and improved efficiency in the server-related and network products businesses, along with higher profit from the services business as a result of higher sales and cost reductions.

Other losses such as losses on foreign currency exchange and disposal of fixed assets were lower than expected, though corporate taxes were higher than anticipated because of increased dividend income from subsidiaries and affiliates outside Japan.

As a result, net income totaled 4.6 billion yen compared with the previous break-even projection.

(2) Full-year projection

The company projects net sales of 5,050.0 billion yen for the full year ending March 31, 2009, a decline of 300.0 billion yen from the previous projection. Significant sales declines are expected in the Device Solutions and Ubiquitous Product Solutions businesses. In the Device Solutions business, the entire market for logic LSI devices has deteriorated significantly due to inventory adjustments by digital home appliance, mobile phone, automotive and a wide range of other users in the manufacturing industry along with intensified price competition. The market for electronic components has also suffered from tougher global competition. In the Ubiquitous Product Solutions business, global competition and a general downturn in demand have impacted sales of HDDs, PCs and mobile phones. In addition, since the end of September 2008 the yen has appreciated rapidly in value, and the current sales projections reflect revised yen-euro and yen-pound rates for the second half of the year.

Operating income is revised to 150.0 billion yen, a decline of 70.0 billion yen compared to the July projection. While profitability remains strong in the services, server-related businesses and network products businesses, profit from the logic LSI device, electronic components, HDD, PC, and mobile phone businesses is expected to decline due to lower net sales in those areas. Net income is also revised to 60.0 billion yen, a decline of 40.0 billion yen from the previous forecast, due to the same reasons stated above.

Reference: Expected currency exchange impact on sales, income

 (billion yen)
  Net Sales Operating Income Net Income
Current projections 5,050.0 150.0 60.0
Comparison with July forecast
(Portion of above expected from exchange rate impact)

Average currency exchange rate forecast for second half of fiscal 2008, with previous July forecast in parentheses:
$1=100 yen (100 yen); €1=125 yen (155 yen); £1=160 yen (200 yen)

* 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, mobile phones, 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:

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Company:Fujitsu Limited

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
City: Tokyo
Company: Fujitsu Limited, , , , ,