Tokyo, October 23, 1998 -- Fujitsu Limited today reported consolidated net sales of 2,413.3 billion yen (US$17.8 billion*) for the first half of Fiscal Year 1998. Thanks to robust demand overseas for the company's computers and information processing systems as well as telecommunications systems, consolidated sales for the six-month period ending September 30, 1998 were up nearly 7% over the same half-year period in 1997.However, due in large part to lower demand in Japan's telecommunications sector and depressed prices in the global market for IC memories, margins declined 1.4% compared to the first half of the previous fiscal year, and consolidated operating income fell 57% to 44.1 billion yen ($327.0 million). Consolidated net income for the period was 8.3 billion yen ($61.9 million), representing a decline of 45% in comparison to the 15.3 billion yen recorded in the first half of FY1997.
In communications systems, restrained capital investment by telecommunications companies in Japan was partly offset by buoyant overseas demand, particularly for infrastructure to handle the rapid growth in Internet-related business and data services in the U.S. market. Despite a 32% increase in overseas communications systems sales, consolidated sales in this area as a whole declined by 20% to 351.9 billion yen ($2.6 billion).
Consolidated sales of computers and other information processing systems, on the other hand, rose by 17% to 1,685.8 billion yen ($12.5 billion). Software and services -- in particular systems integration and outsourcing -- enjoyed robust growth both in Japan and overseas. The 56% growth in overseas sales in this category also reflected the full consolidation of Amdahl's healthy sales for the half-year period, as well as favorable results at ICL. In addition, strong overseas demand for personal computers and small form factor hard disk drives also helped offset sluggish sales of domestic client-server systems owing to the depressed economic situation in Japan.
In semiconductors and electronic components, strong demand in the U.S. was not sufficient to fully counter the negative effects of severe conditions in the IC memory market arising from global oversupply and severe price deterioration. Overall consolidated sales for the sector declined by 2% to 285.3 billion yen ($2.1 billion).
Due to the previously mentioned decline in net income, Fujitsu reported a 45% decrease in half-year consolidated net income per share to 4.5 yen ($0.03), down from 8.3 yen in the first half of FY 1997.
Founded in 1935, Fujitsu Limited is a leading provider of information technology products and solutions for the global marketplace. Financial results reflect the performance of 516 consolidated subsidiaries (452 in first half FY1997), including ICL PLC, Amdahl Corp., Fujitsu America, Inc., Fujitsu Microelectronics, Inc. and Fujitsu Australia Ltd., as well as 36 affiliates (35 in first half FY1997), including Fanuc Ltd. and Advantest Corporation, using the applied equity method.
* Note: All yen figures have been converted to U.S. dollars for convenience only at a rate of $1=135 yen. Comparisons between fiscal half-year periods reflect conversion of yen amounts into dollars at this uniform rate. Net income per share is based on the weighted average number of shares of common stock outstanding during the respective periods.
Amidst continuing advances in multimedia and networking, demand for information processing and communications systems, software and services is expanding globally, and IT remains an industry with especially strong growth potential. In order to offer superlative total IT solutions to customers around the globe, Fujitsu has been strengthening ties among its group companies throughout the world. Focusing on key group members Fujitsu Limited in Japan/Asia, ICL in Europe and Amdahl in the U.S., the Group is committed to leveraging its collective talents and resources and maximizing synergies to expand business opportunities. Projections for Fiscal Year 1998
In the second half of the current fiscal year, Fujitsu anticipates steady growth in its information processing business, particularly in software & services and personal computer-related areas. Increased demand is also foreseen in overseas telecommunications markets, especially in the U.S. and Europe, although poor conditions in the domestic market are expected to depress revenue in the communications systems segment overall. And continuing adverse conditions in the semiconductor market will negatively impact business in the electronic devices sector. Within this challenging environment, Fujitsu will continue to restructure its operations with the aim of improving growth and profitability.
Acknowledging that volatility in global currency and stock markets makes accurate forecasting difficult, Fujitsu makes the following projections at this time regarding consolidated earnings for FY1998:
Fujitsu Limited Consolidated Earnings Forecast for FY1998
(April 1, 1998 - March 31, 1999)
billion yen Change Net Sales 5,400 + 8% Net Income 45 --- Notes for editors
Fujitsu Limited is a leading provider of information technology products and solutions for the global marketplace. Founded in Japan in 1935 as a telephone equipment maker, the Fujitsu Group had consolidated revenues of $37.7 billion in the fiscal year ended March 31,1998. With over 500 group companies, including Amdahl and ICL, Fujitsu is one of the world's largest suppliers of computers and information systems solutions, telecommunications and semiconductor products, software and services. The Fujitsu Group has over 180,000 employees world-wide and operations in more than 100 countries.
Homepage: http://www.fujitsu.com/Press contacts
Yuri Momomoto, Bob Pomeroy
Fujitsu Limited, Public Relations
Tel : +81-3-3215-5236 (Tokyo)
Fax : +81-3-3216-9365
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