Tokyo, July 30, 2013
Fujitsu today reported a consolidated net loss of 21.9 billion yen (US$221 million), representing an improvement of 3.5 billion yen compared to the loss posted in the first quarter of fiscal 2012*. The operating loss was an improvement over April projections. Fujitsu is keeping the full-year projections unchanged.
Net sales were 999.2 billion yen (US$10,093 million) for the first quarter of fiscal 2013, an increase of 4.4% from the first quarter of fiscal 2012. Sales in Japan declined by 5.7%. Sales of system integration services rose, but mobile phone and PC sales declined. Sales outside Japan rose 22.8%. On a constant currency basis, sales rose by 3%. Sales increased largely because of a recovery in demand for optical transmission systems in North America, as well as higher sales of LSI devices and electronic components. The impact of foreign exchange fluctuations for the first quarter was to increase net sales by approximately 65.0 billion yen.
Gross profit was 259.6 billion yen, an increase of 8.9 billion yen from the first quarter of fiscal 2012. Selling, general and administrative expenses were 282.4 billion yen, an increase of 5.0 billion yen from the first quarter of fiscal 2012, primarily as a result of yen depreciation.
Fujitsu recorded an operating loss of 22.8 billion yen (US$230 million), an improvement of 3.9 billion yen from last fiscal year's first quarter.
"We are beginning to see a positive impact of structural reforms in the LSI business and businesses outside Japan as well as various workforce-related measures and progress in streamlining corporate headquarter functions," commented Masami Yamamoto, President of Fujitsu Limited. "We will continue to pursue aggressive structural reforms to achieve profitable growth for this fiscal year and years forward."
*Retroactive Revisions from Changes in Accounting Standards
The Fujitsu Group's consolidated subsidiaries outside of Japan, which have adopted International Financial Reporting Standards (IFRS), have also adopted the amended IAS 19 Employee Benefits. As a result, for comparison figures, we have retroactively revised the financial statement figures stated for fiscal 2012. Compared to the amounts prior to the retroactive application, the amounts in the first quarter of fiscal 2012 for operating income, income before income taxes and minority interests, and net income have all been reduced by 1696 million yen.
Business Segment Results
Consolidated net sales in the Technology Solutions segment amounted to 677.5 billion yen (US$6,843 million), an increase of 8% from the same period in fiscal 2012. Sales in Japan were essentially unchanged. Server-related sales declined due to a slower-than-expected initial launch period for new UNIX server products. In infrastructure services, outsourcing services grew steadily, but overall sales were weak compared to the first quarter of fiscal 2012, when demand related to network services increased as telecommunication carriers tried to keep up with higher volumes of communications traffic. For systems integration services, sales grew primarily in the manufacturing, financial services, and public sectors. Sales outside Japan increased 21.1%. On a constant currency basis, sales increased by 3%. Sales of infrastructure services declined due to the impact of corporate spending restraints from the economic downturn in Europe. In addition, sales of new UNIX server models were weak. Sales of optical transmission systems in North America increased on a recovery in spending by telecommunications carriers. The segment posted operating income of 2.5 billion yen (US$25 million), up 3.4 billion yen compared to the first quarter of fiscal 2012.
Net sales in the Ubiquitous Solutions segment were 215.9 billion yen (US$2,181 million), a decline of 8% from the first quarter of fiscal 2012. Sales in Japan were down by 16.9%. PC sales declined as unit sales fell on account of the shrinking consumer PC market, as well as the large-volume orders received during the first quarter of last year from customers in the financial services industry. In mobile phones, sales fell due to the shrinking market for feature phones, in addition to revisions in the smartphone sales strategies of telecommunication careers. Sales outside Japan increased 18.7%. On a constant currency basis, sales increased 2%. The segment posted an operating loss of 17.1 billion yen (US$173 million), down 15.1 billion yen from the first quarter fiscal 2012.
Net sales in Device Solutions amounted to 145.3 billion yen (US$1,468 million), an increase of 11.5% compared to the first quarter of fiscal 2012. Sales in Japan declined 6.4%. Sales of LSI devices used in smartphones increased, but sales of LSI devices used in digital audio-visual equipment and manufacturing equipment decreased. Sales of electronic components also fell. Sales outside Japan increased 33.6%. On a constant currency basis, sales increased 10%. Sales of LSI devices for smartphones, particularly in Asia, increased. The segment recorded operating income of 7.6 billion yen (US$77 million), an improvement of 11.2 billion yen compared to the first quarter of fiscal 2012.
Fiscal 2013 Consolidated Projections
Projections for the first half of fiscal 2013 and full-year fiscal 2013 remain unchanged from the projections announced in the beginning of the fiscal year.
* Yen figures have been converted to U.S. dollars for convenience only, at a uniform rate of US$1 = 99 yen, the approximate closing rate on June 30, 2013.
