Data Centre


Fujitsu in a funk over feeble network sales

Storage 'n' servers flat, PCs & tabs OK but mobes, base stations fall

By Chris Mellor


Fujitsu's revenues have been hit by weak mobile phones and base station sales. Servers and storage were flat while PC sales rose a little.

In its third fiscal 2017 quarter, total Fujitsu revenues were ¥1tn ($9.26bn, £6.4bn), 1.7 per cent less than a year ago. Profits were ¥11.9bn ($108.5m, £76m), a 41.3 per cent fall on the year-ago ¥20.3bn ($185m, £130m).

Fujitsu said there was a ¥13bn ($119m, £83m) restructuring cost incurred in the quarter.

The results noted: "Although sales of PCs rose and the weak yen served to increase revenue in yen terms, it was not enough to cover the adverse effects of a decline in revenue from network products, which was very strong in the previous year's period, and a decline in unit shipments of mobile phones."

There are three product groups: Technology Solutions, Ubiquitous Solutions, and Device Solutions. Fujitsu also lines up its cross-company trade numbers under the title "Other/Elimination and Corporate (O/EC)" – incorporating strategic expenses, basic research and supercomputer projects.

The Technology Solutions unit, basically the EMEA IT systems business, has services and system platform components. The system platforms include servers, storage and network products (optical transmission and mobile phone base stations).

Ubiquitous Solutions includes PCs, tablets and smartphones. Device Solutions is a semiconductor business producing ASICs and FRAM among other things.

Technology Solutions revenues declined 3.2 per cent year-on-year to ¥740.1bn ($6.75bn, £4.74bn) – ¥636.9bn ($5.8bn, £4.1bn) of that was services, down 0.4 per cent, while ¥103.2bn ($941m, £661m) was the servers, storage and network products – down 17.6 per cent.

This fall was primarily due to the network products, where revenue fell 31 per cent to ¥48.6bn ($443m, £311m). The other system products revenue of ¥54.5bn ($497m, £349m) had a decline of 0.3 per cent.

The main damage was done by network products revenues collapsing. Fujitsu said: "In the second and third quarters of the previous fiscal year, there were very strong sales of mobile phone base stations in Japan, and sales are down this period by comparison."

Ubiquitous Solutions revenues rose 1.4 per cent to ¥165.9bn ($1.51bn, £1.06bn) despite lower Raku-Raku feature phone shipments because there were higher PC sales to enterprises in Japan and revenues were helped by the impact of a weaker yen.

Device Solutions climbed 3.4 per cent to ¥141.7bn ($1.29bn, £9.08bn), also assisted by the weaker yen. The O/EC sector costs were flat at ¥44.6bn ($406m, £285m).

We see a company with revenues coming from low or no-growth products and no strategy yet revealed to break out of this situation. ®

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