Fujitsu Reports Fiscal 2009 Second-Quarter Financial Results

Fujitsu Reports Fiscal 2009 Second-Quarter Financial Results
– Profitability improves dramatically from first quarter –
(Source: Fujitsu)

Fujitsu, a leading provider of IT-based business solutions for the global marketplace,  reported consolidated net income of 72.4 billion yen (US$804 million) for the second quarter (July 1 – September 30, 2009) of fiscal 2009.

Net income increased 68.1 billion yen compared with the second quarter of fiscal 2008 due primarily to a gain on the sale of investment securities. Second-quarter operating income totaled 18.9 billion yen (US$210 million), representing a decline of 13.8 billion yen from a year ago, but a significant improvement from the operating loss of 37.1 billion yen in the first quarter of fiscal 2009.

Quarterly net sales totaled 1,142.3 billion yen (US$12,692 million), a decline of 10.5% compared to the same period last year and an increase of 9.4% from the first quarter of 2009.

The profitability of the core Technology Solutions business, comprising IT services and system platforms, rebounded strongly in the second quarter compared with the first quarter, while losses in the Device Solutions business narrowed sharply thanks to a rebound in demand for logic LSI products and aggressive business reform measures. In the Ubiquitous Product Solutions business, despite an increase in mobile phone sales in Japan, second-quarter revenue declined both versus the same period last year and the first quarter of 2009.

On a geographic basis, second-quarter profitability in and outside Japan declined compared with the same period last year, but improved in each region compared with the first quarter. In Japan, in particular, operating income rebounded from an operating loss of 12.3 billion yen in the first quarter to an operating profit of 33.3 billion yen.

For the first half of fiscal 2009 (April 1 – September 30, 2009), the company posted net sales of 2,186.6 billion yen (US$24,296 million), a decline of 10.9% compared with the same period in fiscal 2008, an operating loss of 18.2 billion yen (US$202 million), which marked a 16.7-billion-yen improvement over the target but a deterioration compared with operating income of 38.5 billion in the first half of last year. Net income totaled 43.2 billion yen (US$480 million), an improvement of 28.2 billion yen over the target and 38.6 billion yen over last year.

“For the first half of the year, we beat our earnings target despite a very challenging business environment,” said Michiyoshi Mazuka, president of Fujitsu Limited. “I’m confident that the resiliency of our core businesses and our dedication to lean, customer-centric management will enable us to meet our targets for the full year.”

Business Segment Results

Second-quarter net sales in the Technology Solutions segment, which includes the System Platforms and Services sub-segments, totaled 754.1 billion yen (US$8,379 million), declining 8.8% compared to the same period in fiscal 2008. Sales in Japan decreased by 14.1% due to lower solutions sales in the financial services, manufacturing and distribution sectors. Sales outside Japan declined 6% after adjusting to negate exchange rate fluctuations and the impact of the conversion of Fujitsu Siemens Computers into a consolidated subsidiary (subsequently renamed Fujitsu Technology Solutions (Holding) B.V.). Operating income for the segment was 37.6 billion yen (US$418 million), a deterioration of 11.4 billion yen over the same period last year, due to the sales decline and special charges. Compared with the first quarter, segment sales increased 12.9% and operating income rebounded from the loss of 15.3 billion yen.

Net sales in the Ubiquitous Product Solutions segment were 235.8 billion yen (US$2,620 million), a decrease of 5.5% from the same period in fiscal 2008. Sales in Japan fell by 14.2%, while sales outside Japan declined 28% on an adjusted basis. Although mobile phone sales in Japan increased, intensified price competition and weaker corporate demand led to a decline in PC sales worldwide. HDD sales also declined worldwide. The segment posted operating loss of 3.5 billion yen (US$39 million), a deterioration from the loss of 1.0 billion yen a year ago as well as the first-quarter profit.

Net sales in the Device Solutions segment totaled 137.2 billion yen (US$1,524 million), a decrease of 23.2% compared to the second quarter of fiscal 2008. Sales of logic LSI devices rebounded strongly from the first quarter, but remained significantly lower compared to a year ago. The segment posted an operating loss of 1.6 billion yen (US$18 million), an improvement of 0.9 billion yen from last year’s second quarter.

Fiscal 2009 Consolidated Earnings Projections

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

 (billion yen)
  FY 2008
(Actual)
FY 2009
(Forecast)
Change
Net Sales 4,692.9 4,800.0 107.0
Operating Income 68.7 90.0 21.2
Net Income

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 = 90 yen, the approximate closing rate on September 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

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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: www.fujitsu.com.