Fujitsu ¥27 billion in the red as Japanese PC sales slump

Japanese tech giant Fujitsu has posted a 27.3 billion yen ($220 million) quarterly operating loss.
Written by Chris Duckett, Contributor

Fujitsu has plunged into the red on sluggish quarterly sales of personal computers and network equipment, but the company says it will still meet its full-year profit target.

The sprawling IT conglomerate fell into a 27.3 billion yen ($220 million) operating loss for its fiscal first quarter, compared to this time last year when the company posted a 7.2 billion yen profit. Sales for April to June edged down slightly to 1.065 trillion yen, it said.

Broken down geographically, the company experienced a 3.1 percent decrease in revenue inside Japan, mostly due to a 27 billion yen fall in its PC, mobile phone, and mobilewear sales, and a 3.6 percent increase in overall revenue outside Japan.

"For PCs, revenue declined as the cycle of higher demand for upgrades resulting from the ending of support for an operating system had peaked in the first quarter of the prior fiscal year," the company said.

Fujitsu also cited higher expenses for the weak results.

"In addition to the impact of lower revenues from network products and PCs, there was the negative impact of higher procurement costs in Europe," the company said.

The company's services division saw a 5 percent increase in revenue thanks to increased government and finance spending, but profit fell 3 percent to 10 billion yen.

"In the services sub-segment, revenue from the Americas was weak, but revenue rose in Australia and Asia," the company said. "Despite the positive impact of higher sales, operating profit declined because of higher expenses to expand sales in the internet service provider business, among other factors.

"In the system platforms sub-segment, operating profit declined due to lower revenue and on account of one-time expenses of approximately 5 billion yen to cover the costs of reallocating employees and other factors in the network business in Japan."

The company left its annual forecast unchanged, expecting a 100 billion yen net profit on sales of 4.85 trillion yen.

The weak results hit Fujitsu shares, which fell 3.18 per cent in afternoon Tokyo trading.

In Australia, the company recently announced that it had partnered with Google to deliver a managed chromebook service for Australian and New Zealand businesses, and would initially target companies operating in the health, education, and retail sectors.

Using the service, enterprises will be able to control and monitor the usage of the devices. This will include user management; device configuration and management; provisioning of corporate approved applications from the Google Store; listing of sites that devices and users can access; environment look and feel; controlled OS updates; OS and hardware support; and hard installation.

With AAP

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