The company posted strong sales of consumer PCs, and the strong yen also helped to contain costs. In mobile phones, a delay in the shipment of a new model until July resulted in lower sales than projected in the company's initial plans in April. In optical transmission systems, sales of earlier models of equipment in the U.S. and other markets declined sharply, but the effect of lower fixed costs stemming from the restructuring efforts implemented last year helped to trim operating losses.

In servers, although sales in overseas markets are growing, large-scale orders in Japan from such sectors as telecommunications and finance were minimal, leaving overall sales sharply lower compared to the first quarter of last year.

Sales of small form-factor hard disk drives declined, in part because of delays in shipping new models of hard drives for servers, but the operating loss has been reduced by the impact of lower fixed costs resulting from last year's restructuring initiatives.

In PCs, by getting a jump on competitors in introducing new summer models with improved audio-video functions, Fujitsu was able to increase both unit shipments and market share. While the increase in shipment volumes is expected to carry through for the full year, the company also anticipates intensified price competition, and therefore projections for operating income remain unchanged.

In mobile phones, although there was a delay in shipping a new handset model equipped with a high-resolution camera, that model will be introduced in the second quarter, and the company expects to meet its original projections for sales and unit volume shipped for the full year. With respect to profitability, although unit volumes will increase, there are also higher production costs associated with more sophisticated product functions, the impact of which is already reflected in the company's projections.

In transmission systems, with a delayed recovery in capital spending among both foreign and domestic telecom carriers, the company anticipates that sales will be lower than last year's levels. On the other hand, in North America, shipments of the next generation optical transmission equipment for Verizon Communications and other telecom operators are materializing, and, with the impact of lower fixed costs stemming from last year's restructuring, the company anticipates a substantial narrowing of operating losses.

In servers, while shipments of new models have been strong in Europe, those in the U.S. have been slower than anticipated. In the second quarter, volume shipments will begin in Japan for a new low-priced server based upon Fujitsu's new TRIOLE IT infrastructure, which will enhance the company's ability to deal with price competition and is expected to make a solid contribution to sales and operating income.

In small form-factor hard disk drives, shipments for notebook PCs are strong, and the business unit is expected to return to profitability for the full year.