​Fujitsu posts 11.2b yen Q1 loss as tech revenue drops

Japanese IT giant Fujitsu has remained in the red this quarter, posting a 11.2 billion yen operating loss.

Japanese conglomerate Fujitsu has released its fiscal first quarter results, posting a total operating loss of 11.2 billion yen, a 16 billion yen improvement year-on-year.

Revenue in the Technology Solutions segment came in at 672.7 billion yen, a decrease of 6.4 percent over the same time last year, with operating profit up 11.1 billion yen to 7.1 billion yen.

The Japanese market accounted for 430.4 billion yen of the technology segment's revenue while international revenue dropped 18 percent to form the remaining 242.3 billion yen.

Technology Services sub-segment revenue also fell by 5.4 percent to 578.3 billion yen with Fujitsu blaming the slump on weak sales in Europe and the United States. Despite Japanese sales rising only 3 percent for the quarter, Services operating profit was up 51 percent to 15 billion yen.

Additionally, revenue in the Technology System Platforms sub-segment dropped 12.2 percent to 94.4 billion yen, with both local and international markets experiencing a decline over the same quarter last year. Operating loss for the sub-segment came in 6 billion yen higher than last year thanks to server-related business, primarily in x86 servers, to a loss of 7.8 billion yen. Fujitsu attributed the weak performance to the continued investment constraints by telecommunications carriers it is experiencing in both Japan and North America.

Ubiquitous Solutions, which includes mobile phones and personal computers, saw a 23.3 billion yen year-on-year drop to 219.8 billion yen. This quarter sees the sector back in the black, with Fujitsu reporting 4.6 billion yen in operating profit.

For mobile phones, Fujitsu said the significant decline in revenue from the previous year was primarily in high-end models due to a longer replacement cycle.

Revenue from PCs in Europe also fell, while revenue in the mobilewear sub-segment rose, primarily in Japan and Europe. For PCs, operating profit improved due mainly to the strength of the yen against the US dollar, Fujitsu said.

Looking forward, the IT giant expects to report total revenue of 4,600 billion yen with an operating profit of 120 billion yen for the full fiscal year.

It also expects total Technology Solutions revenue to tip 3,200 billion yen with services accounting for the majority of the sales.

Fujitsu plunged into the red on sluggish quarterly sales of personal computers and network equipment in its first quarter last year, reporting an operating loss of 27 billion yen.

Earlier this month, Oracle and Fujitsu announced a partnership that will see Oracle Cloud Application and Platform services -- such as Oracle Database Cloud Service and Oracle Human Capital Management (HCM) Cloud -- now be powered by Fujitsu's datacentres in Japan.

As part of the companies' agreement, Fujitsu will also push Oracle cloud solutions to enterprise clients in the country and beyond, with the pair saying the business decision will result in "a high-performance cloud environment to meet the IT and business needs of customers."