Technology products and services giant Fujitsu Ltd has reported operating profits at all three of its main operating units in its second fiscal quarter, but lowered its revenue forecast for the full-year period.
The Tokyo, Japan-based company said that it had reaped the benefits of recent restructuring in a market which it said was characterized by increasing corporate IT investment but severe price competition.
However, Fujitsu expects a downturn in demand for semiconductors, displays and mobile phones in the second half of its current financial year, and has now cut its annual sales forecast by JPY 50 billion ($470 million).
Fujitsu expects revenue in the full-year period ending March 30, 2005 to grow 2.8% to JPY 4.9 trillion ($46 billion). The company is sticking to its previous profitability guidance of JPY 70 billion ($658 million) in net profit.
In the three months ending September 30, 2004, Fujitsu made a net profit of JPY 3.7 billion ($34.6 million) compared to a year-ago loss of JPY 18.8 billion ($176 million), on revenue that grew 0.7% to JPY 1.2 trillion ($11.4 billion).
Fujitsu’s best-performing division during the quarter was electronic devices where sales rose 10.2% to JPY 190 billion ($1.8 billion). Operating profit increased 115% to JPY 10.7 billion ($101 million). The company said that it had enjoyed solid demand for system chips using digital AV equipment.
Fujitsu’s largest operating unit, Software and Services, reported a 1.1% rise in second-quarter revenue to JPY 532 billion ($5 billion), with operating profit down 18.5% to JPY 26.5 billion ($249 million). Overseas sales within this division rose 8.1% to JPY 130 billion ($1.2 billion) driven by new wins in the UK public sector, while domestic sales fell 0.9% to JPY 402 billion ($3.8 billion).
The company said that during the first half of the year, higher sales of infrastructure projects were offset by lower sales of solutions and systems integration in Japan, where pricing pressure outpaced progress in cost-cutting.
Revenue from the Platforms division rose 4.1% to JPY 428 billion ($4 billion), driven by strong growth in sales of base stations for 3G mobile communications systems, as well as sales of financial terminals able to accommodate new banknotes in Japan.