Fujitsu result hit by Thai flooding, weak IT demand

Fujitsu cut its outlook for the fiscal year to March 2012, citing disruptions to supplies from the flooding in Thailand, weak demand for LSI devices and a delayed recovery in ICT spending in its home market Japan and abroad. The company now expects annual sales of JPY 4.49 trillion, down from an estimate last October of JPY 4.54 trillion and a reported JPY 4.53 trillion in the previous fiscal year. The forecast for operating profit falls to JPY 100 billion from JPY 135 billion, and net profit is estimated to drop to JPY 16.9 billion from JPY 26.6 billion the previous year. For the three months to December, Fujitsu reported an operating loss of JPY 4.3 billion, versus a profit of JPY 16.5 billion a year earlier, while sales fell 1.5 percent to JPY 1.08 trillion. The impact of the Thai floods reduced sales by JPY 34 billion and operating income by JPY 14 billion in the third quarter. Sales of mobile phones, car audio and navigation systems, and LSI devices were negatively affected by delays in procuring parts, as well as by associated customer-side production adjustments, as a result of the floods in Thailand. In addition, sales of LSI devices and electronic components were hit by weak demand. The spreading popularity of smartphones, however, boosted sales of networking equipment and mobile phones, enabling overall sales in Japan to rise 3.8 percent. Sales outside of Japan declined by 10.7 percent, and on a constant-currency basis sales fell by 5 percent. Sales of infrastructure services declined, primarily in the US and Europe. In addition, US sales of optical transmission systems, which had been strong, were adversely affected by a temporary pullback in spending by carriers. Fujitsu said it was making progress in cloud services and improving profitability at the ICT business abroad, and it will continue with structural reforms of its business. Quarterly results included JPY 2.7 billion in restructuring costs.