Fujitsu Reports FY1999 Half-Year Financial Results.

TOKYO--(BUSINESS WIRE)--Oct. 26, 1999--

Consolidated Net Sales Rise Slightly as Strong Sales of Fiber Optic

Transmission Systems in U.S. Help Offset Sluggish Global Demand for

Large-Scale Servers

Fujitsu Limited today reported consolidated net sales of 2,444.3 billion yen ($22.844 million(a)) for the first half of Fiscal Year 1999 (April 1 - September 30, 1999). Thanks in part to strong network-related demand in the U.S. for the company's fiber optic transmission systems, continued gains in sales of services and software, as well as favorable growth in sales of flash memory and logic devices, this represents an increase of a little over 1% compared with the same half-year period in 1998.

Reduced operating expenses associated with the restructuring of the company's electronic devices business helped to limit the effects of falling prices in the small form-factor magnetic disk drive market and lower sales of large-scale servers. As a result, consolidated operating income rose to 63.6 billion yen ($595 million), an increase of 44% over the previous year. Nevertheless, due to the precipitous rise in the yen during the latter part of the period and extraordinary losses associated with restructuring, half-year consolidated net income was 2.3 billion yen ($22 million), a decline of 72% from the first half of FY1998.

Looking at the results by business segment, the effect of lower sales to Japanese telecommunications companies was offset by major gains in the company's fiber optic transmission systems business in the U.S., as well as by income from large-scale undersea fiber optic cable projects. As a result of the strong growth in overseas sales, half-year consolidated telecommunications sales expanded to 346.5 billion yen ($3,239 million), an increase of 7% over the same period in the previous year.

Although personal computer sales grew smartly, particularly in Japan, restrained corporate spending made for sluggish sales of large-scale servers in Japan, and overseas sales of such systems also declined. Likewise, overseas sales of small form-factor magnetic disk drives were lower, adversely impacted by falling market prices. Overall, half-year consolidated information processing sales amounted to 762.0 billion yen ($7,122 million), a decrease of 6% from last year. Fujitsu First Half FY1999 Earnings - Page 2

Turning to services and software, although the company's systems integration and outsourcing business showed steady growth in Japan, the high yen had a diminishing effect when the sales of overseas units were converted into yen. Total half-year sales in this segment were 909.7 billion yen ($8,502 million), roughly equivalent to last year's level.

As Fujitsu continued to reduce its commodity DRAM business and focus on higher value-added devices, it benefited from growing demand for flash memory chips, logic ICs, compound semiconductors and SAW filters. Overall half-year consolidated sales in the electronic devices segment rose to 267.0 billion yen ($2,495 million), a 6% increase over the previous year.

Fujitsu Limited (TSE: 6702) is a leading provider of comprehensive information technology and network solutions for the global marketplace. Financial results reflect the performance of 509 consolidated subsidiaries (516 in first half FY1998), including ICL PLC, Amdahl Corporation, Fujitsu America, Inc., Fujitsu Microelectronics, Inc. and Fujitsu Network Communications, Inc., as well as 27 affiliates (36 in FY1998), including Fanuc Ltd. and Advantest Corporation, using the equity method.

(a) Note: All yen figures have been converted to U.S. dollars for

convenience only at a rate of $1=107 yen. Comparisons between

fiscal half-year periods reflect conversion of yen amounts into

dollars at this uniform rate.

Projections for Fiscal Year 1999

Despite concerns over sluggish information processing demand against the backdrop of the Year 2000 issue, Fujitsu anticipates steady growth in consolidated telecommunications sales in response to growing network demand, particularly in the United States. Continued gains are also expected in the services and software sector, and as it moves forward with the restructuring of its electronic devices business, the company anticipates expanded demand for its flash memory and logic products. Keeping in mind the uncertainties of future trends in currency rates and the U.S. and Japanese economies, Fujitsu makes the following projections at this time regarding consolidated earnings for FY1999.

-0-

       Fujitsu Limited Consolidated Earnings Forecast for FY1999
                    (April 1, 1999- March 31, 2000)

                        billion yen              change from FY1998
Net Sales                   5,500                        +5%
Operating Income              210                       +59%
Net Income                     60                        --


                    Summary of Consolidated Results

                          Yen                       Yen   U.S. dollars
                       (millions)               (millions)  (millions)
                 1st Half     1st Half                        1st Half

                 FY1999        FY1998   Change(%)  FY1998      FY1999

Net Sales      Y2,444,346   Y2,413,301     1.3    Y5,242,986   $22,844
Operating
 Income            63,617       44,151    44.1       132,287       595
Income Before
 Income Taxes      14,436       41,502   -65.2        49,625       135
Net Income
 (Loss)             2,374        8,367   -71.6       (13,638)       22

Amounts Per Share of Common Stock:
Basic
 Earnings            Y1.2         Y4.5   -72.3        Y(7.3)    $0.012
Cash
 Dividends           Y5.0         Y5.0      --        Y10.0     $0.047

Common Stock Issued:      1999/9/30  1,938,514 thousand shares
                          1998/9/30  1,874,959 thousand shares
                          1999/3/31  1,884,139 thousand shares

Net Sales by Business Segment

                          Yen                      Yen    U.S. dollars
                       (millions)               (millions)  (millions)
                 1st  Half    1st Half                       1st Half
                 FY1999        FY1998   Change(%) FY1998       FY1999
Telecom-
 munications     Y346,573     Y324,398     6.8     Y681,059     $3,239
Information
 Processing       762,081      814,603    -6.4    1,801,409      7,122
Services
 & Software       909,723      913,571    -0.4    2,034,569      8,502
Electronic
 Devices          267,008      252,396     5.8      506,645      2,495
Financing          50,294            -       -            -        470
Other
 Operations       108,667      108,333     0.3      219,304      1,016
TOTAL          Y2,444,346   Y2,413,301     1.3   Y5,242,986    $22,844

Consolidated Subsidiaries: 509 companies Affiliates: 27 companies (using the equity method).

Note: all yen figures have been converted to U.S. dollars for convenience only at a uniform rate of $1 = 107 yen.