Fujitsu foresees gloom, blames exchange rates
Weak biz spending, yen and components
Operating profits at Fujitsu slid by a little more than third in Q2 due to weakness at its device unit, slow Japanese biz spending and unfavourable forex conversions.
The Japanese IT conglomerate recorded a 35 per cent drop in operating profits to 24.1bn yen (£198.6m) – ahead of its expectations – in the quarter ended September but sales edged up 0.6 per cent to 1.1 trillion yen (£9.1bn).
“I am pleased that we were able to beat our profit targets despite a challenging business environment after the devastating earthquake in Japan,” said president Masami Yamamoto.
Sales at the Technology Solutions (TS) unit fell 1.2 per cent to 726.2bn yen (£5.9bn) and operating profits fell 9 per cent to 43.1bn yen (£355m). The declines were attributed to slowing demand for systems/ integration services in Japan.
Outside of its homeland territory, TS sales were flat but excluding the impact of exchange rate fluctuations they were up 5 per cent and operating income grew "due to improved performance in European sales of infrastructure services".
Ubiquitous Solutions – the PC, mobile phone and mobilewear unit – went up 6.1 per cent to 280bn yen (£2.3bn) on a wave of a consumer refreshes in Japan although enterprise spending in the country was sluggish. Operating profit was flat.
The LSI and electronic components unit – Device Solutions – recorded operating losses of 3.8m yen (£31m) as sales declined more than 8 per cent to 147.5bn yen (£1.2bn).
“We are now faced with an array of new risks – from the dramatically appreciating yen and turmoil in capital markets as a consequence of financial issues in the United States and European countries, to a deceleration of growth in emerging markets," said boss Yamamoto.
Fujitsu said full-year profit expectations remain unchanged but has reduced sales forecasts by 60bn yen (£49m) "in light of anticipated exchange rates", it said. ®