Fujitsu Limited (JCN Newswire)
Tokyo, July 27, 2012 - ( JCN Newswire ) - Fujitsu today reported a consolidated net loss of 23.7 billion yen (US$300 million) for the first quarter of fiscal 2012, representing a deterioration of 3.3 billion yen from the first quarter of fiscal 2011. The first quarter loss was in line with April projections, and no change has been made to full-year projections for increased income.
First quarter consolidated net sales totaled 957.3 billion yen (US$12,118 million), a decline of 2.9% from the corresponding period of the previous fiscal year. On a constant currency basis, sales were essentially unchanged from the previous year. Sales in Japan for the quarter remained on par with those of the first quarter of fiscal 2011. While Fujitsu reported lower sales of mobile phones and LSI devices, sales of car audio and navigation systems recovered following sluggish demand in the first quarter of fiscal 2011, when sales were adversely impacted by the Great East Japan Earthquake. Sales of network products also increased. Outside Japan, despite the positive effects of higher sales for car audio and navigation systems, net sales declined by 7.6% due to lower sales of optical transmission systems in the US and lower sales of UNIX servers.
Fujitsu recorded an operating loss of 25.0 billion yen (US$316 million), representing a deterioration of 7.9 billion yen compared to the first quarter of fiscal 2011. This was the result of overall lower sales of LSI devices and optical transmission systems, as well as rising procurement costs associated with obtaining certain dollar-denominated parts and components in Europe, where the euro has weakened against the US dollar. Furthermore, despite a decline in R&D costs, primarily for mobile phones, there were continued upfront investments in areas such as network products.
Fujitsu also recorded a loss of 24.9 billion yen in income before income taxes and minority interests, a year-on-year improvement of 1.4 billion yen. Other income and expenses were essentially break even, representing an improvement of 9.3 billion yen, primarily due to lower foreign exchange losses and the fact that, in the first quarter of fiscal 2011, Fujitsu recorded disaster-related losses of 7.5 billion yen stemming from the aftermath of the earthquake.
"We are moving away from a defensive stance to go on the offensive, and we will challenge ourselves to achieve further growth. Moving forward, we will continue to go on offense with structural reforms, accelerate globalization, and create new services businesses," commented Masami Yamamoto, President of Fujitsu.
Business Segment Results
Consolidated net sales in the Technology Solutions segment amounted to 627.1 billion yen (US$7,938 million), down 4.9% from the first quarter of fiscal 2011. Sales in Japan were essentially unchanged. In system integration services, despite the impact of fewer large-scale system deals in the financial services sector and a shift toward spending on hardware by telecommunications carriers, the segment is experiencing a recovery in manufacturing, retailing and public sector spending. Sales outside Japan declined 12.3%. Contributing factors included a lower level of spending on optical transmission systems by North American telecommunications carriers, as well as a decline in sales of UNIX servers. Other server-related sales were adversely impacted by the economic downturn in Europe and a slowing pace of recovery in the US.
The segment posted operating income of 0.8 billion yen (US$10 million), a decrease of 1.6 billion yen compared to the first quarter of fiscal 2011. In Japan, despite the impact of lower sales with large-scale system integration and server-related system deals, as well as upfront R&D investments, mainly for network products, income rose overall on the back of higher network-related sales. Outside Japan, improvements were made to the profitability of the European infrastructure services business, but income deteriorated on the impact of lower optical transmission systems and server-related sales.
Net sales in the Ubiquitous Solutions segment were 234.6 billion yen (US$2,970 million), essentially unchanged from the first quarter of fiscal 2011. Sales of mobile phone fell. The introduction of new models in the first quarter was limited, while the release of numerous new models is planned for the second quarter. Overall sales of PCs declined on account of intensified price competition in the consumer market as companies took steps to reduce inventory of current models. Sales of the Mobilewear sub-segment's car audio and navigation systems increased due to lower automobile production outside Japan in the first quarter of fiscal 2011. The Ubiquitous Solutions segment posted an operating loss of 2.0 billion yen (US$25 million), representing a year-on-year deterioration of 2.0 billion yen.
Net sales in Device Solutions amounted to 130.3 billion yen (US$1,649 million), a decline of 7.5% compared to the first quarter of fiscal 2011. Sales in Japan declined 11.4% and sales outside Japan declined 2%. However, sales increased 1% on a constant currency basis. For electronic components, sales of semiconductor packages, primarily to Asia, increased as a result of the market recovery. The Device Solutions segment recorded an operating loss of 3.6 billion yen (US$46 million), representing a deterioration of 2.6 billion yen from the first quarter of fiscal 2011.
Revisions to Full Year's Revenue Projections
As a result of adjustments in the anticipated exchange rates, net sales projections have been revised downward by 20.0 billion yen, to 4,530.0 billion yen.
Fujitsu is the leading Japanese information and communication technology (ICT) company offering a full range of technology products, solutions and services. Over 170,000 Fujitsu people support customers in more than 100 countries. We use our experience and the power of ICT to shape the future of society with our customers. Fujitsu Limited (TSE:6702) reported consolidated revenues of 4.5 trillion yen (US$54 billion) for the fiscal year ended March 31, 2012. For more information, please see www.fujitsu.com.
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