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Fujitsu Reports Fiscal 2009 First-Quarter Financial Results

- Quarterly loss posted; sales and profit projections raised -

Fujitsu Limited

Tokyo, July 30, 2009

Fujitsu, a leading provider of IT-based business solutions for the global marketplace, today reported a consolidated net loss of 29.1 billion yen (US$303 million*) for the first quarter of fiscal 2009 (April 1 – June 30, 2009), but raised its sales and income projections for the full year ending March 31, 2010 on rebounding demand for electronic components.

Consolidated net sales for the first quarter totaled 1,044.3 billion yen (US$10,878 million), a decrease of 11.3% compared to the first quarter of fiscal 2008. The company reported an operating loss of 37.1 billion yen (US$386 million), compared with income of 5.8 billion yen a year earlier. In addition to lower sales, the yen appreciation, increased pension costs, and special one-time charges contributed to the loss.

Sales of IT services remained steady in the quarter, down 1.7% from the same period a year ago due to lower hardware solutions sales to financial services and retailing customers. In Japan, demand for systems integration services in the public sector and outsourcing services was firm. Sales of system platforms declined on sluggish overall corporate IT investment in Japan and a decline in sales of optical transmission systems outside Japan. In the ubiquitous products business, price competition undercut sales of PCs and hard disk drives. Though sales from the device solutions business also fell, demand for electronic components rebounded strongly from the fourth quarter of fiscal 2008.

Geographically, the regions of Japan, the Americas, and Asia-Pacific/China reported revenue declines. Revenue increased 38.1% in the Europe/Middle-East/Africa (EMEA) region as a result of the conversion of Fujitsu Siemens Computers into a consolidated subsidiary.

For the full year ending March 31, 2010, Fujitsu raised its net sales projection by 20.0 billion yen to 4,820.0 billion yen, the operating income target by 10.0 billion yen to 90.0 billion yen, and the net income target by 5.0 billion yen to 25.0 billion yen, due primarily to rebounding demand for electronic components.

"We're gearing up to achieve record profits in fiscal 2011 as part of the new medium-term business plan starting this year," said Kuniaki Nozoe, president of Fujitsu. "Raising our earnings projections for fiscal 2009 puts us a step closer to achieving this. The core goal of our business plan is completing a strategic transformation into a global IT products and services company that can consistently deliver value to our customers and profits to our shareholders."

For the first half ending September 30, 2009, Fujitsu revised sales and income targets upward on rebounding demand for electronic components and car audio and navigation products, along with growing sales and improved efficiencies in the mobile phone business. The company now projects net sales of 2,210.0 billion yen, up 10.0 billion from the initial forecast in April, an operating loss of 35.0 billion yen, representing an improvement of 15.0 billion yen over the previous forecast, and a net loss of 55.0 billion yen, an improvement of 10.0 billion yen.

Business Segment Results

For the first quarter, consolidated net sales in the Technology Solutions segment, which includes the System Platforms and Services sub-segments, declined 4.2% to 668.2 billion yen (US$6,960 million). Sales in Japan decreased by 8.2% due to lower sales of ATM and POS solutions to customers in the financial services and manufacturing/distribution sectors. Sales outside Japan increased 2.6% primarily as a result of the conversion of Fujitsu Siemens Computers into a consolidated subsidiary (subsequently renamed Fujitsu Technology Solutions (Holding) B.V.). The operating loss for the segment was 15.3 billion yen (US$159 million), a deterioration of 23.5 billion yen over the same period last year, due to lower product sales, lower profitability on some services projects, higher pension and goodwill amortization costs, and one-time charges for expensing in-process R&D as part of the costs of converting Fujitsu Technology Solutions into a consolidated subsidiary.

Net sales in the Ubiquitous Product Solutions segment were 237.8 billion yen (US$2,477 million), a decrease of 12.5% from the same period in fiscal 2008. Sales in Japan fell by 19.0%, while sales outside Japan increased 1.7% with the inclusion of the PC business of Fujitsu Technology Solutions. Mobile phone sales in Japan declined, and intensified price competition and weaker corporate demand led to a decline in PC sales worldwide. The segment posted operating income of 6.5 billion yen (US$68 million), supported by cost-efficiency measures.

Net sales in the Device Solutions segment totaled 118.9 billion yen (US$1,239 million), a decrease of 31.0% compared to fiscal 2008. Though sales of logic LSI devices and electronic components fell compared with the first quarter of fiscal 2008, demand continued to rebound from the third and fourth quarters of fiscal 2008. The segment posted an operating loss of 15.5 billion yen (US$161 million), a deterioration of 10.7 billion yen from last year’s first quarter.

Fiscal 2009 Consolidated Earnings Projections

The company's current earnings projections for fiscal 2009 are presented below.

(Billion Yen)
  First Half Full Year
  FY 2008
FY 2009
Change FY 2008
FY 2009
Net Sales 2,453.7 2,210.0 -243.7 4,692.9 4,820.0 127.0
Operating Income 38.5 -35.0 -73.5 68.7 90.0 21.2
Net Income 4.6 -55.0 -59.6 -112.3 25.0 137.3

Complete information on Fujitsu’s financial results, including financial tables, explanation of results and supplementary information, may be found at:

For further information on the earnings forecast revision, please see the press release "Fujitsu Revises FY 2009 Earnings Projections" also announced today and available on the website above. Further information on the new medium-term management plan may also be found at the website.

* All yen figures have been converted to U.S. dollars for convenience only at a uniform rate of US$1 = 96 yen, the approximate closing rate on June 30, 2009.

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 175,000 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 4.6 trillion yen (US$47 billion) for the fiscal year ended March 31, 2009. For more information, please see:

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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: 30 July, 2009
City: Tokyo
Company: Fujitsu Limited, , , , ,