Tokyo, May 25, 1999 -- Fujitsu Limited, a global information technology and network solutions leader, today reported consolidated net sales of 5.24 trillion yen for fiscal 1998 (April 1, 1998 - March 31, 1999), an increase of 5 percent over the previous fiscal year. Converted into dollars (1*), this represents approximately $43.3 billion. In general, strong gains in overseas sales in fiscal 1998 helped make up for sluggish conditions in the domestic market. Total consolidated overseas sales, including local production as well as exports from Japan, increased by 20 percent to 2.12 trillion yen ($17.4 billion) and accounted for 40 percent of all sales, up from 35 percent in fiscal 1997.

However, due primarily to cutbacks in domestic telecommunications investment and the global slump in semiconductor prices, consolidated operating profit declined by 25 percent to 132.2 billion yen ($1.0 billion). Moreover, in addition to extraordinary losses resulting from the closing of the company's semiconductor manufacturing plant in the U.K. and other semiconductor business restructuring expenses, an exceptional charge of 38.1 billion yen ($314 million) relating to the realignment of an ICL Pathway private finance initiative project (2*) resulted in a consolidated net loss of 13.6 billion yen ($112 million) for the fiscal year. In fiscal 1997 Fujitsu recorded a net profit of 5.5 billion yen ($46 million).

The rapid development of IT and telecommunications technology, with the Internet as its core, is accelerating the pace of globalization in every industry and bringing great changes to the shape of business and individual lifestyles around the world. As a worldwide provider of comprehensive IT and network-based solutions, Fujitsu has an important role to play in the emerging Internet era. Accordingly, the company's management views the Internet as the core driver of its business and is committed to leveraging the Fujitsu Group's considerable expertise in this area to achieve greater growth and profitability.

Consolidated Sales by Core Business Areas

Led by robust domestic and international sales of systems integration and outsourcing services, fiscal 1998 consolidated sales of services and software jumped by 17 percent to 2.03 trillion yen ($16.8 billion). Of these, domestic software and services sales grew by 11 percent to 1.26 trillion yen ($10.4 billion), while overseas sales in this category rose by 29 percent to 773.8 billion yen ($6.3 billion).

Strong overseas sales of computers and information processing systems, up 30 percent to 726.5 billion yen ($6.0 billion), helped offset a 5 percent decline in domestic sales (1.07 trillion yen, or $8.8 billion), boosting consolidated sales for the category as a whole to 1.80 trillion yen ($14.8 billion). In addition to expanded sales of large-scale global servers (mainframes) in the U.S., the company enjoyed robust growth in sales of personal computers in the European consumer market, while strong demand for small form-factor hard disk drives was reflected in solid sales gains, particularly overseas.

Thanks to increased network demand, mainly in Europe and the U.S., overseas sales of communications systems grew by 12 percent to 285.8 billion yen ($2.3 billion). However, due to major reductions in capital investment by Japanese telecommunications services providers, domestic sales declined by 27 percent to 396.1 billion yen ($3.2 billion), resulting in a 15 percent drop in overall consolidated communications systems sales to 681.0 billion yen ($5.6 billion).

Lower sales volumes resulting from the company's strategic reduction of its commodity DRAM business helped push overall consolidated sales of semiconductors and electronic components down 6 percent to 506.6 billion yen ($4.1 billion). Domestic sales declined by 7 percent to 238.2 billion yen ($1.9 billion), while overseas sales were off by 5 percent to 268.4 billion yen ($2.2 billion). During this period the company undertook significant restructuring measures aimed at boosting the profitability of this business.

The results for the Fujitsu Group reflect the performance of 518 consolidated subsidiaries worldwide (513 in FY1997), including Amdahl Corporation, ICL PLC, Fujitsu America, Fujitsu-AMD Semiconductor and Fujitsu Network Communications, as well as 34 affiliates (32 in FY1997), including Fanuc Ltd. and Advantest Corporation, using the applied equity method.
Home page: http://www.fujitsu.com/

Notes:
1* All yen figures have been converted into U.S. dollars for convenience only at the uniform rate of 121 yen to the dollar.
2* A large-scale plan to automate postal services throughout the U.K. and to construct, implement and operate a system to deliver social benefit payments through the postal service. The original Private Finance Initiative (PFI) contract between ICL Pathway, a subsidiary company of ICL PLC (itself a wholly owned subsidiary of Fujitsu) and the UK's Post Office Counters Limited (POCL) and Department of Social Security (DSS), has been replaced by a fixed-value Design, Build & Operate contract.

Projections for Fiscal Year 1999 (April 1, 1999 - March 31, 2000)

Although growth in sales of information processing hardware in Japan is considered problematic, favorable conditions should continue overseas in the communications systems and information processing equipment sectors. Demand for electronic devices is also expected to recover both domestically and overseas. Taking these conditions into account, Fujitsu believes that further improvements in its operational structure will help it to achieve growth in each of its core business areas. Sales and income projections for fiscal 1999 are as follows:

	Consolidated Forecast for FY 1999
Net Sales	5,650	billion yen (+8%)
Operating Income	280	billion yen (+112%)
Net Income	80	billion yen
	Unconsolidated Forecast for FY 1999
Net Sales	3,350	billion yen (+5%)
Operating Income	130	billion yen (+226%)
Net Income	45	billion yen

About Fujitsu

Fujitsu Limited (TSE 6702) is a leading provider of comprehensive information technology and network solutions for the global marketplace. Comprising over 500 group companies and affiliates worldwide -- including ICL, Amdahl and DMR Consulting Group -- the Fujitsu Group had consolidated revenues of 5.24 trillion yen ($43.3 billion) in the fiscal year ended March 31, 1999. With world-class hardware and software technology in computers, telecommunications and electronic devices, and a corps of 55,000 systems and services experts around the world, Fujitsu is uniquely positioned to harness the power of the network to help its customers succeed in today's rapidly changing business environment.
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

LINKS:

Investor Relations
Annual Report March 1998
Graphical Highlights from last year
FY97 Financial Results
FY98 Half-Year Financial Results