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Fujitsu Reports Fiscal 2010 Second-Quarter Financial Results

- Profitability improves across all business segments -

Fujitsu Limited

Tokyo, October 27, 2010

Fujitsu, a leading provider of ICT-based business solutions for the global marketplace, today reported consolidated net income of 17.4 billion yen (US$207 million*) for the second quarter of fiscal 2010 (July 1 – September 30, 2010), compared with 72.4 billion yen in the same period last year, when the company's results included significant profits from the sale of investment securities.

Second-quarter consolidated net sales totaled 1,100.1 billion yen (US$13,096 million), a decrease of 3.7% from the second quarter of fiscal 2009. Excluding the impact of the appreciation of the Japanese yen and other factors, sales increased by about 5%. Operating income totaled 37.1 billion yen (US$442 million), nearly double the operating income in the second quarter of fiscal 2009. All three of the company's main business segments—Technology Solutions, Ubiquitous Solutions, and Device Solutions—posted increases in profitability in the second quarter compared to the previous year.

The Technology Solutions segment, which comprises ICT services and system platforms, posted an increase in income primarily as a result of higher sales of system integration services and lower pension-related expenses in Japan. Income from the Ubiquitous Solutions segment, which comprises PCs, mobile phones, and car audio and navigation equipment, improved on higher sales of PCs and car audio and navigation systems in Japan and improved efficiencies in the PC business. Income from the Device Solutions business, comprised of LSI devices and electronic components, rebounded strongly to a quarterly profit compared to the previous year as a result of strong sales growth and business reforms.

Sales in Japan increased by 3.3%, as demand increased for PCs, mobile phones, and car audio and navigation systems. Sales outside Japan fell 14.5% due largely to the yen's appreciation and the divestiture of the hard disk drive business in the previous year. Excluding the yen's appreciation and the HDD business divestiture, sales outside Japan increased by about 6% due to higher sales of LSI devices and electronic components, particularly in Asia, along with growing sales of network products in North America.

For the April-September first half, Fujitsu reported consolidated net sales of 2,147.4 billion yen (US$25,564 million), a decline of 1.8% from the first half of fiscal 2009. Excluding the impact of the yen appreciation and the sale of the HDD business, sales increased about 6%. Operating income was 47.1 billion yen (US$561 million), an improvement of 65.4 billion yen from the same period last year and a 35% improvement over the July forecast. Net income totaled 19.0 billion yen (US$226 million), representing a decline of 24.1 billion yen compared to the first half of fiscal 2009, when significant profits from the sale of investment securities were booked.

"I'm pleased to report that our profitability continues to improve, and we were able to beat our operating profit target for the first half of the year," said Masami Yamamoto, president of Fujitsu. "Our improved profitability means that we can continue to make important strategic investments in global expansion and in new cloud computing services that will contribute to the success of our customers."

Business Segment Results

For the second quarter, consolidated net sales in the Technology Solutions segment were 735.0 billion yen (US$8,750 million), a decline of 3.5% from the second quarter of fiscal 2009. Excluding the impact of exchange rate fluctuations, sales increased by 1%. Sales in Japan increased by 1.6%. Sales of systems integration services and server-related products were higher as a result of mission-critical system upgrades in the financial services sector. Sales outside Japan declined by 12%, but were flat when excluding the impact of exchange rate fluctuations. Although there was an increase in sales of optical transmission systems in North America, sales of infrastructure services in Europe were adversely affected by the prolonged economic downturn. The segment posted operating income of 47.7 billion yen (US$568 million), an improvement of 5.1 billion yen in comparison with the second quarter of fiscal 2009.

Net sales in the Ubiquitous Solutions segment were 264.3 billion yen (US$3,146 million), an increase of 2.7% compared to the same period in fiscal 2009. Sales in Japan increased by 11.1% on higher demand for PCs, mobile phones, and car audio and navigation systems. Sales outside of Japan declined by 16.2%, and excluding the impact of currency rate fluctuations, sales decreased by about 5%. Sales of PCs in Europe were adversely impacted by corporate spending constraints and price competition. Operating income for the segment was 4.4 billion yen (US$52 million), an increase of 3.2 billion yen compared to last year's second quarter.

Net sales in Device Solutions were 161.1 billion yen (US$1,918 million), an increase of 8.6% compared to the second quarter of fiscal 2009. Sales in Japan increased by 7.7% on higher demand for both LSI devices and electronic components. Sales outside Japan increased by 9.6% on higher sales of LSI devices, primarily in Asian markets, growth in electronic components sales, primarily in North America. Operating income for the segment was 5.2 billion yen (US$62 million), an improvement of 7.1 billion yen over the second quarter of fiscal 2009 due mainly to the higher sales and structural reforms in the LSI business in Japan.

Fiscal 2010 Consolidated Projections

The company's current earnings projections for the full-year fiscal 2010 are presented below.

(Billion Yen)
  FY 2009(Actual) FY 2010(Forecast) Change
Net Sales 4,679.5 4,670.0 -9.5
Operating Income 94.3 185.0 90.6
Net Income 93.0 95.0 1.9

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

* All yen figures have been converted to U.S. dollars for convenience only at a uniform rate of US$1 = 84 yen, the approximate closing rate on September 30, 2010.

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
- Risks related to product or services defects
- Potential emergence of unprofitable projects
- Risks related to R&D investments, capital expenditures, business acquisitions, business restructuring, etc.
- Risks related to natural disasters and unforeseen events
- Changes in accounting policies

About Fujitsu

Fujitsu is a leading provider of ICT-based business solutions for the global marketplace. With approximately 170,000 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$50 billion) for the fiscal year ended March 31, 2010. 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.

This press release has been revised as of December 17, 2018.

Date: 27 October, 2010
City: Tokyo
Company: Fujitsu Limited, , , , ,

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