Feeds

Red ink not as deep as expected for Fujitsu in Q1

Systems integration, networking, and weakened yen save the day

The Essential Guide to IT Transformation

Japanese IT conglomerate Fujitsu may have been been hit hard by the decline in PC and smartphone sales and seen its server business slump as well, but the weakening of the yen by the Japanese government to boost the indigenous economy has helped inflate overseas sales revenues, and an uptick in the systems integration business has helped Fujitsu report a smaller loss than it was anticipating in its most recent quarter.

During that period, the company had ¥999.2bn ($10.93bn) in revenues across all of its divisions, and reported a net loss of ¥21.9bn ($221m). While this loss was not as large as expected, Fujitsu is uncertain enough about the remaining three quarters of its fiscal 2013 to leave its profit guidance unchanged.

"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," said Fujitsu president Masami Yamamoto in a statement announcing the figures. "We will continue to pursue aggressive structural reforms to achieve profitable growth for this fiscal year and years forward."

The Technology Solutions segment at Fujitsu brought in ¥677.5bn ($6.84bn) in the first fiscal quarter, up 8 per cent from the year-ago period. Sales in Japan were unchanged, Fujitsu said, and were partially impacted by the transition period as the "Athena" Sparc M10 server line, based on the Sparc64-X processor designed by Fujitsu, was rolled out in Japan in January and picked up for resale by Oracle in April.

Within this segment, the Systems Platform group nonetheless posted ¥122.5bn ($1.24bn) in sales, up 8.1 per cent and bolstered by networking products in Japan and Europe where Fujitsu still has a strong presence. Overall system product sales were down 3.1 per cent to ¥47.6bn ($480.8m), and networking product sales jumped 16.6 per cent to ¥74.9bn ($756.6m).

Sales of gear for LTE networks was up, but sales for gear to build out 3G networks was off compared to a year ago, Fujitsu said in a detailed analysis (PDF) of its results. The systems group had an operating loss of ¥2.9bn yen, which was better than the ¥4bn operating loss in the year-ago period. But it is still losing dough just the same.

The services business within the Technology Solutions segment had an 8 per cent revenue spike to ¥554.9bn ($5.6bn), and brought ¥5.5bn ($55.6m) to the operating income line. Infrastructure services sales rose 8.5 per cent to ¥372.2bn ($3.76bn), while systems integration and other solutions rose a nearly equal 7.2 per cent to ¥182.7 ($1.85bn)

Add it all up, and the core systems business at Fujitsu booked an operating income of ¥2.5bn, or about $25.3m at the exchange rates prevailing as the quarter came to an end in June.

The Ubiquitous Solutions segment at Fujitsu, which peddles PCs, smartphones, and other mobile gear, had an 8 per cent decline to ¥215.9bn ($2.18bn). The company said that PC unit sales were down and faced a tough compare as large clients in the financial services industry in Japan had done major PC upgrades this time last year. PC sales in Japan plummeted 16.9 per cent, Fujitsu said.

With feature phones waning and telcos revising their sales strategies for smartphones, mobile phone sales were off, but were up 2 points on a constant-currency basis. The Ubiquitous Solutions unit had an operating loss of ¥17.1bn ($173m), which was wider than the ¥15.1bn loss in the first quarter of fiscal 2012. Increased parts procurement costs thanks to the devalued yen hurt profits in this segment, Fujitsu said.

That leaves the remainder of Fujitsu's chip biz, parts of which were sold off to Panasonic and Taiwan Semiconductor Manufacturing Corp in February, and other parts of which went to Spansion in April. That said, the Device Solutions segment raked in ¥145.3bn ($1.47bn), up 11.5 per cent, with an operating income of ¥7.6bn ($77m). ®

Boost IT visibility and business value

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.