Fujitsu Limited announced today that it has revised its consolidated earnings projections for fiscal 2008, previously announced on February 17, 2009.
2. Reasons for Revisions to Earnings Projections
Operating income totaled 68.7 billion yen, an increase of 18.7 billion yen from the previous forecast due to component cost reductions and improved efficiencies in the server, HDD and other businesses.
In regard to other income and expenses, while net losses on foreign exchange and losses on the disposal of property, plant and equipment were lower than expected, the net equity in losses of affiliates was higher than initial projections due to business restructuring expenses at equity-method affiliates.
The net loss was 112.3 billion yen, 62.3 billion yen higher than the forecast, as a result of impairment losses related to the property, plant and equipment of the LSI business, business restructuring expenses related to the HDD business, and a revaluation loss on investment securities resulting from a significant decline in listed share prices, among other factors.
Primary Other Expenses:
(1) Impairment losses
Impairment losses related to the LSI business totaled 49.9 billion yen due to a change in the future planned use of the property, plant and equipment of Mie Plant's 300mm Fab No. 2. Losses were also recognized in relation to the assets of the optical transmission system, electronic components and other businesses whose profitability has declined. For more information, please see the announcement "Regarding Impairment Losses in Fiscal 2008" released today.
(2) Business restructuring expenses
The previous forecast factored in restructuring expenses of approximately 35.0 billion yen in relation to the HDD business transfers, and 10.0 billion yen from the reorganization of LSI wafer manufacturing facilities. These expenses have been revised to 37.0 billion yen and 11.3 billion yen, respectively. In addition, restructuring expenses of 5.8 billion yen were recognized from the reorganization of the components and global businesses. For more information, please see the announcement "Regarding Business Restructuring Expenses in Fiscal 2008" released today.
(3) Revaluation losses on investment securities
The company recognized a revaluation loss on investment securities of 12.3 billion yen due to the steep decline in listed share prices as of March 31, 2009. For more information, please see the announcement "Regarding Loss on Revaluation of Investment Securities in Fiscal 2008" released today.
* 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
