January 2008
Tokyo, — Fujitsu Limited, a leader in customer-focused IT and communications solutions for the global marketplace, reported consolidated operating income of 46.6 billion yen (US$417 million) for the third quarter of fiscal 2007 (October 1, 2007 – December 31, 2007), a sixfold increase of 39.5 billion yen over the same period of fiscal 2006.
All three of the Fujitsu Group's business segments posted higher operating income, lifting operating margin to 3.6%, a record for the third quarter.
The increase in income was the result of higher operating leverage as well as greater cost efficiencies. Consolidated net income totaled 5.5 billion yen (US$49 million), increasing by five times over the same period in fiscal 2006.
Consolidated net sales totaled 1,294.9 billion yen (US$11,562 million*), an increase of 8.1% over the third quarter of fiscal 2006.
The increase in sales was broadly based, with each of Fujitsu’s three business segments reporting year-on-year sales gains of at least 6%, resulting in the company's best third-quarter sales performance since it began releasing quarterly results in 2001. Sales in Japan increased by 9.7%, while sales outside Japan rose 5.6%. Services sales remained strong, rising 8.0%, and PC/mobile phone sales grew 19.4%.
The company posted a gain of 2.4 billion yen from the sale of shares in affiliates and a valuation loss of 19.8 billion yen, primarily as a result of the steep decline in the market value of listed securities.
For the first nine months of the fiscal year, the Group recorded consolidated net sales of 3,808.0 billion yen (US$34,000 million), operating income of 90.5 billion yen (US$809 million), and a net loss of 3.8 billion yen (US$34 million).
Business Segment Results
Consolidated third-quarter net sales in the Technology Solutions segment, which includes the System Platforms and Services sub-segments, rose 6.8%, to 765.7 billion yen (US$6,837 million).
Sales in Japan increased by 5.4% on higher sales of system integration and outsourcing services. Sales outside of Japan increased by 9.2% due to the expansion of Services business capabilities through European acquisitions, along with increased sales of servers.
Operating income for the segment was 34.2 billion yen (US$306 million), up 19.6 billion yen over the previous year as a result of higher operating leverage and improved cost efficiencies in the server and Services businesses.
Net sales in the Ubiquitous Product Solutions segment, which includes PCs, mobile phones, hard disk drives (HDDs) and other products, were 305.4 billion yen (US$2,728 million), an increase of 11.7% over the same period last year. Sales in Japan posted double-digit growth, rising by 17.0% on higher sales of PCs and other products. Sales outside Japan increased by 4.1% on higher sales of notebook PCs, mainly in Asia.
Operating income for the segment was 13.4 billion yen (US$121 million), a sharp increase of 12.3 billion yen over the comparable period last year.
Contributing to the income growth were higher operating leverage in PC operations, efforts to cut component costs, and an improvement in the company's HDD business, which returned to profitability as declines in unit prices eased.
Net sales in the Device Solutions segment increased 8.3%, to 203.0 billion yen (US$1,813 million). Sales in Japan rose by 16.6%, driven by higher sales of 90nm advanced LSI devices.
Sales outside of Japan declined by 4.6%, primarily reflecting the realignment in the sales organization for Flash memory products used in mobile phones. Operating income for the segment rose sharply, to 9.4 billion yen (US$84 million), an increase of 8.9 billion yen over the third quarter of fiscal 2006.
Higher operating leverage in advanced logic devices resulted in sharply higher profitability.
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