Technology and IT services giant Fujitsu slipped into the red in the first half of its current fiscal year, as a result of accounting changes and lower hard drive prices.
In the six months to the end of September, Fujitsu made a net loss of JPY 9.3bn ($85.9m), compared to a profit of JPY 14.8bn ($136.6m) in the same period of the previous fiscal year, on sales that grew 6.4% to JPY 2.5 trillion ($23.1bn). Operating profit was down 13.2% at JPY 43.9bn ($404.2m).
Changes in Fujitsu’s accounting policy had a significant impact on the company’s first-half performance, hitting net income to the tune of JPY 17.0bn ($156.4m) in total. However, the company’s selling, general, and administrative expenses also rose 4.1% to JPY 589.8bn ($5.4bn), as the company spent heavily on expanding its services business in Europe and was hit by rising development costs around next generation network and chip technology.
Fujitsu’s largest business unit, technology solutions, which pulls together the company’s enterprise server and IT services activities, grew sales by 5.5% in the first half to JPY 1.5 trillion ($13.9bn). The services arm reported a solid 9.2% increase in sales to JPY 1.2 trillion ($10.9bn), driven by application and systems integration sales, which jumped 17.0%.
The ubiquitous product solutions division grew first-half revenue by 8.8% to JPY 575.1bn ($5.3bn), largely due to an 11.9% leap in sales of PCs and mobile phones. Hard disk drive revenue growth was more modest at 2.4%.
Despite the first-half loss, Fujitsu is still forecasting net profit of JPY 65bn ($598m) in full-year 2007. The company also expects operating profit to hit JPY 195bn ($1.8bn), on revenue of JPY 5.4 trillion ($49.7bn), up nearly 6% on the previous fiscal year.