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Fujitsu Reports Fiscal 2010 Third-Quarter Financial Results

– Steady profits generated by main business segments despite lowering of full-year earnings projections –

Fujitsu Limited

Tokyo, January 28, 2011

Fujitsu, a leading provider of ICT-based business solutions for the global marketplace, today reported consolidated net income of 16.5 billion yen (US$204 million*) for the third quarter of fiscal 2010 (October 1 – December 31, 2010), compared with 4.1 billion yen in the same period last year.

Third-quarter consolidated net sales totaled 1,096.4 billion yen (US$13,536 million), a decrease of 4.4% from the third quarter of fiscal 2009. Excluding the impact of the appreciation of the Japanese yen, sales were essentially unchanged. Operating income totaled 21.2 billion yen (US$262 million), a decline of 12.3 billion yen compared to the third quarter of fiscal 2009.

All three of the company's main business segments—Technology Solutions, Ubiquitous Solutions, and Device Solutions—were profitable in the third quarter, and the Device Solutions segment, which has substantially realigned its manufacturing operations, delivered higher profitability compared to the third quarter of fiscal 2009.

The Technology Solutions segment, which comprises ICT services and system platforms, posted lower income compared with the same period in fiscal 2009 on lower sales of mobile phone base stations in Japan and lower sales of UNIX servers outside of Japan. Income from the Ubiquitous Solutions segment, which comprises PCs, mobile phones, and mobilewear including car audio and navigation systems, declined due to a decrease in sales of mobilewear. The Device Solutions business, comprised of LSI devices and electronic components, posted sharply higher income as past restructuring measures continued to result in strong performance.

For the first nine months of fiscal 2010, Fujitsu reported consolidated net sales of 3,243.8 billion yen (US$40,047 million), a decline of 2.7% from the first nine months of fiscal 2009. Excluding the impact of the yen appreciation and the sale of the HDD business, sales increased by 4%. Operating income was 68.4 billion yen (US$844 million), an improvement of 53.0 billion yen from the same period last year. Net income totaled 35.6 billion yen (US$440 million), representing a decline of 11.7 billion yen compared to the first nine months of fiscal 2009, when significant profits from the sale of investment securities were booked.

"We continue to generate steady profits from our core business areas despite the challenging market environment we find ourselves in," said Masami Yamamoto, president of Fujitsu. "We are turning these challenges into new business opportunities by making significant investments for future growth. This will position us for long-term successes with our customers as we deliver new value through human-centric services."

Business Segment Results

For the third quarter, consolidated net sales in the Technology Solutions segment were 718.1 billion yen (US$8,865 million), a decline of 4.9% from the third quarter of fiscal 2009. Excluding the impact of exchange rate fluctuations, sales decreased by 1%. Sales in Japan decreased by 1.6%. Corporate spending constraints limited sales of systems integration services, and sales of mobile phone base stations also declined. Sales outside Japan declined by 9.7%, but increased by 1% in local currency terms on higher sales of x86 servers, primarily in continental Europe. The segment posted operating income of 24.9 billion yen (US$307 million), a decline of 6.6 billion yen in comparison with the third quarter of fiscal 2009.

Net sales in the Ubiquitous Solutions segment were 289.5 billion yen (US$3,574 million), a decrease of 2.4% compared to the same period in fiscal 2009. Sales in Japan were essentially unchanged, with flat PC sales, as higher sales of mobile phones were offset by lower sales of automobile audio and navigation systems. Sales outside of Japan declined by 9.5%. Excluding the impact of currency rate fluctuations, sales increased by 2% on higher PC sales. Operating income for the segment was 3.6 billion yen (US$44 million), a decrease of 12.5 billion yen compared to last year's third quarter.

Net sales in Device Solutions were 155.3 billion yen (US$1,917 million), an increase of 2.3% compared to the third quarter of fiscal 2009. Sales in Japan increased by 10% on higher demand for both LSI devices and electronic components. Sales outside Japan decreased by 7.5%, but rose 1% in local currency terms. Operating income for the segment was 8.4 billion yen (US$104 million), a sharp improvement of 5.1 billion yen over the third quarter of fiscal 2009, primarily as a result of higher sales and lower overhead expenses.

Fiscal 2010 Consolidated Projections

Earning projections for full-year fiscal 2010 were lowered due to the delay in the recovery of ICT spending in Japan and the deterioration in profitability of some projects outside Japan.

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

(Billion Yen)
  FY 2009 Full-Year Results FY 2010 Full-Year Forecast Change vs. October 2010 Forecast
Net Sales 4,679.5 4,570.0 -100.0
Operating Income 94.3 145.0 -40.0
Net Income 93.0 75.0 -20.0

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

* All yen figures have been converted to U.S. dollars for convenience only at a uniform rate of US$1 = 81 yen, the approximate closing rate on December 31, 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:

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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.

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

Date: 28 January, 2011
City: Tokyo
Company: Fujitsu Limited, , , , , , , , , ,