Fujitsu Reports FY2001 First Quarter Financial Results; Overseas Slowdown in IT Spending, Restructuring Costs Depress Earnings Despite Modest Rise in Overall Sales.Business Editors TOKYO--(BUSINESS WIRE)--July 27, 2001 Fujitsu (company) Fujitsu - A Japanese elecronics corporation. Fujitsu owns ICL, Amdahl Corporation, and DMR. Home USA, Japan. Limited today reported consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of 1.09 trillion One thousand times one billion, which is 1, followed by 12 zeros, or 10 to the 12th power. See space/time. (mathematics) trillion - In Britain, France, and Germany, 10^18 or a million cubed. In the USA and Canada, 10^12. yen for the first quarter of fiscal year 2001 (April 1 - June June: see month. 30, 2001), a 2% increase over the first quarter of fiscal 2000. Converted into US dollars(1), this represents approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $8.7 billion. Higher domestic sales in telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , as well as in information processing information processing: see data processing. information processing Acquisition, recording, organization, retrieval, display, and dissemination of information. Today the term usually refers to computer-based operations. and services & software, were offset by lower overseas sales, particularly in the areas of telecommunications and information processing. In line with problematic economic conditions affecting the worldwide IT industry - including worsening wors·en tr. & intr.v. wors·ened, wors·en·ing, wors·ens To make or become worse. Noun 1. worsening - process of changing to an inferior state decline in quality, deterioration, declension stagnation Stagnation A period of little or no growth in the economy. Economic growth of less than 2-3% is considered stagnation. Sometimes used to describe low trading volume or inactive trading in securities. Notes: A good example of stagnation was the U.S. economy in the 1970s. in the U.S. economy and attendant ATTENDANT. One who owes a duty or service to another, or in some sort depends upon him. Termes de la Ley, h.t. As to attendant terms, see Powell on Morts. Index, tit. Attendant term; Park on Dower, c. 1 7. slowdowns in Japan and East Asia East Asia A region of Asia coextensive with the Far East. East Asian adj. & n. as well as weaker growth in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). - the Fujitsu Group faced a very difficult business
environment in the first quarter. Poor economic conditions led
telecommunications carriers in the U.S. in particular, as well as
companies in other fields and regions, to cut back on capital spending capital spendingSpending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. , and IT-related investment dropped off precipitously pre·cip·i·tous adj. 1. Resembling a precipice; extremely steep. See Synonyms at steep1. 2. Having several precipices: a precipitous bluff. 3. . Moreover, worldwide demand for consumer-use personal computers and cellular phones leveled off, leading to widespread adjustments in production and inventories. In regard to earnings, higher sales of servers and other computing computing - computer products countered sales declines in small form factor hard disk drives to improve overall results in information processing. However, electronic devices earnings were severely impacted by lower prices and a decline in demand as the market worked through excess inventory, and earnings for flash memory, logic ICs and SAW filters in particular suffered. Telecommunications earnings declined along with the drop in sales of optical transport systems in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . As a result of these and other factors, Fujitsu reported a consolidated operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of 42.3 billion yen (US$339 million) for the quarter. In addition, due to charges associated with the reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. of development operations in the U.S. and other restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). measures, the company posted a net loss for the period of 55.4 billion yen (US$444 million). Services & Software First quarter consolidated sales of services & software were 374.9 billion yen (US$3.0 billion), an increase of 4% from the same period in fiscal 2000. Despite a solid increase in domestic sales of services, especially systems integration and outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. services for large corporations, overseas sales declined, dragged down by weaker sales of services in Europe and North America as companies there restrained spending on IT. Information Processing In information processing, consolidated sales totaled 325.3 billion yen (US$2.6 billion), an increase of 2% from the first quarter of last fiscal year. Although sales in Japan of personal computers to consumers declined, overall domestic information processing sales increased, boosted by continuing growth in sales of UNIX servers A medium to large-scale computer system in a network that runs under Unix. Unix servers are widely used as application servers and database servers and are available from a variety of vendors, including Sun, IBM, HP and others. for businesses and higher sales of other large-scale large-scale adj. 1. Large in scope or extent. 2. Drawn or made large to show detail. large-scale Adjective 1. wide-ranging or extensive 2. enterprise servers. Overseas sales decreased, as sales of small form factor magnetic disk drives for desktop personal computers declined, and cutbacks in IT spending led to sluggish demand for servers, particularly in the U.S. Telecommunications Consolidated telecommunications sales for the quarter were flat at 149.3 billion yen (US$1.2 billion). Higher sales of switching systems Switching systems (communications) The assemblies of switching and control devices provided so that any station in a communications system may be connected as desired with any other station. and base station systems for IMT-2000, the next-generation mobile communications system In telecommunication, a communications system is a collection of individual communications networks, transmission systems, relay stations, tributary stations, and data terminal equipment (DTE) usually capable of interconnection and interoperation to form an integrated whole. in Japan, were offset by lower sales of optical transmission systems, reflecting the impact of more severe cutbacks in investment by telecommunications carriers, particularly those based in North America. Electronic Devices Consolidated sales of electronic devices fell 4% to 159.8 billion yen (US$1.3 billion). A slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the growth of global demand for cellular phones and digital audiovisual See A/V. appliances brought about global-scale inventory adjustments in semiconductors. As a result, sales of SAW filters and other devices declined, while flash memory and logic IC sales remained on par with those in the same quarterly period last fiscal year. (1) Note: All yen figures have been converted to U.S. dollars for convenience only at a uniform rate of US$1 = 125 yen, the closing exchange rate on June 30, 2001. Revised Projections for Fiscal Year 2001 As a key industry supporting the future development of the network society, growth prospects for the IT industry in the medium and long term remain strong. Currently, however, Fujitsu expects corporate IT spending cutbacks at North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. telecommunications carriers and other companies to continue along with stagnant stagnant /stag·nant/ (stag´nant) 1. motionless; not flowing or moving. 2. inactive; not developing or progressing. demand for cellular phones and personal computers, making it difficult to foresee fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. a recovery within this fiscal year. As a result, the company anticipates that the Fujitsu Group's optical transport, flash memory and PC-use small form factor hard disk drive businesses will continue to be severely impacted, and that measures to respond to mid-term structural changes in the IT industry will be urgently required. Accordingly, determined to meet the challenges of these severe business conditions head-on head-on adv. 1. With the head or front first: The cars crashed head-on. 2. In open conflict; in direct opposition: , the company will take concerted action to radically improve the profitability of the Fujitsu Group in the next fiscal year and beyond. Measures to be taken in the current fiscal year will include aggressive restructuring initiatives such as reorganizing its development and manufacturing structure on a global basis, rigorously rig·or·ous adj. 1. Characterized by or acting with rigor: a rigorous program to restore physical fitness. 2. Full of rigors; harsh: a rigorous climate. applying the concept of selection and concentration to focus on core businesses, and restructuring its global services & software organization. Taking all these factors into consideration, Fujitsu is at this time making the following revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to the fiscal 2001 earnings projections it made in April. -0-
Fujitsu Limited Consolidated Earnings Forecast for Fiscal 2001
Billion Yen
Revised Forecast Original Forecast
(as of (as of FY2000
July 27, 2001) April 26, 2001) Actual Results
-------------------- ------------------ -----------------
1H FY2001 FY2001 1H FY2001 FY2001 1H FY2000 FY2000
--------- ------ --------- ------ --------- ------
Net Sales 2,450.0 5,400.0 2,650.0 5,800.0 2,490.5 5,484.4
Operating (15.0) 80.0 90.0 270.0 100.2 244.0
Income (Loss)
Extraordinary (280.0) (300.0) (30.0) (35.0) 35.3 (32.1)
Income (Loss)
Net Income (210.0) (220.0) 0 50.0 17.2 8.5
(Loss)
Notes:
- Fiscal year ending March 31; 1H ending September 30.
- Due to uncertainties relating to changes in demand for products
and components in key markets (Japan, U.S., Europe, etc.),
currency exchange rate fluctuations, Japan and U.S. stock market
conditions, and other factors, actual results may vary
substantially from projections above.
- This release contains "Material Information" as specified under
Article166 of the Securities and Exchange Law of Japan. If you
read the contents of this release, you or any other person with
whom you share the acquired information will be deemed the primary
recipients of corporate insider information and will be prohibited
from purchasing, selling, or making other transactions of shares
or securities of Fujitsu Limited until 12 hours has elapsed from
the time when this press release was issued (approximately 2:00
a.m. on July 28, 2001, Japan time).
Fujitsu Reports FY2001 First Quarter Financial Results
[for Quarter ended June 30, 2001]
1. Summary of Financial Results
a. Summary of Consolidated Statements of Operations
Three months ended June 30
Yen U.S. Dollars
(Billions) (Millions)
(except per share data) (except per share data)
---------------------- ----------------------
2001 2000 Change(%) 2001
---------------------- --------- ---------------------
Net Sales Y 1,089.7 Y 1,071.8 +1.7 $8,718
Operating Loss (42.3) (12.5) - (339)
Income (Loss)
Before
Income Taxes (81.0) 18.0 - (649)
Net Loss (55.4) (13.3) - (444)
Amounts Per Share
of Common Stock:
Basic Earnings Y (28.04) Y (6.77) - $(0.224)
b. Net Sales by Business Segment
Three months ended June 30
Yen U.S. Dollars
(Billions) (Millions)
------------- ------------
2001 2000 Change(%) 2001
------- ------- --------- -------------
Services & Software Y 374.9 Y 360.2 +4.1 $3,000
Information Processing 325.3 319.3 +1.9 2,603
Telecommunications 149.3 149.3 -0.0 1,194
Electronic Devices 159.8 165.9 -3.6 1,279
Financing 20.4 20.8 -2.0 164
Other Operations 59.7 56.0 +6.6 478
TOTAL Y 1,089.7 Y 1,071.8 +1.7 $8,718
c. Summary of Consolidated Financial Condition
Yen U.S. Dollars
(Billions) (Millions)
---------------------- ------------
June 30 March 31 June 30
2001 2001 2001
---------------------- ------------
Total Assets Y 4,960.6 Y 5,200.0 $39,685
Shareholders' Equity 1,149.9 1,214.3 9,200
Shareholders' Equity Ratio 23.2 % 23.4 %
2. Projections
Consolidated Earnings Forecast
Yen
(Billions)
---------------------------
1st Half FY2001
FY2001
------------ -------------
Net Sales Y 2,450.0 Y 5,400.0
Operating Income(Loss) (15.0) 80.0
Net Loss (210.0) (220.0)
* Note: All yen figures have been converted to U.S. dollars for
convenience only at a uniform rate of $1= 125 yen.
Consolidated Business Segment Information (Unaudited)
Three months ended June 30
Yen U.S. Dollars
(Billions) (Millions)
--------------------- ------------
2001 2000 Change(%) 2001
--------------------- --------- ------------
Services
Net Sales
& Software
Japan Y 244.7 Y 224.9 +8.8 $1,958
Overseas 130.1 135.3 -3.8 1,042
Unaffiliated
Customers 374.9 360.2 +4.1 3,000
Intersegment 10.7 10.4 +2.7 85
Total Y 385.6 Y 370.7 +4.0 $3,085
======= ======= ==== ======
Operating
Income (Loss) Y (1.2) Y 7.3 - $(10)
======= ======= ==== ======
[As % of Sales] [-0.3%] [2.0%]
Information
Net Sales
Processing
Japan 226.1 206.8 +9.3 1,810
Overseas 99.1 112.4 -11.8 793
Unaffiliated
Customers 325.3 319.3 +1.9 2,603
Intersegment 46.1 43.7 +5.4 369
Total 371.4 363.0 +2.3 2,972
===== ===== ==== =====
Operating Loss (3.9) (19.1) - (31)
===== ===== ==== =====
[As % of Sales] [-1.1%] [-5.3%]
Telecommunications
Net Sales
Japan 74.7 60.7 +23.0 598
Overseas 74.5 88.6 -15.8 596
Unaffiliated
Customers 149.3 149.3 -0.0 1,194
Intersegment 3.1 2.0 +54.5 25
Total 152.4 151.4 +0.7 1,220
====== ===== ===== =====
Operating Loss (20.1) (4.9) - (161)
====== ===== ===== =====
[As % of Sales] [-13.2%] [-3.3%]
Electronic Devices
Net Sales
Japan 76.4 83.4 -8.4 611
Overseas 83.4 82.4 +1.2 668
Unaffiliated
Customers 159.8 165.9 -3.6 1,279
Intersegment 28.8 34.8 -17.3 231
Total 188.7 200.7 -6.0 1,510
====== ===== ===== ======
Operating
Income (Loss) (1.9) 16.1 - (16)
====== ===== ===== ======
[As % of Sales] [-1.0%] [8.1%]
Financing
Net Sales
Japan 20.4 20.8 -2.0 164
Overseas - - - -
Unaffiliated
Customers 20.4 20.8 -2.0 164
Intersegment 1.5 2.1 -30.2 12
Total 21.9 23.0 -4.6 176
===== ===== ===== =====
Operating Income 0.9 0.6 +41.2 8
===== ===== ===== =====
[As % of Sales] [4.5%] [3.0%]
Other Operations
Net Sales
Japan 44.5 41.0 +8.4 356
Overseas 15.2 15.0 +1.6 122
Unaffiliated
Customers 59.7 56.0 +6.6 478
Intersegment 31.0 30.1 +3.1 249
----- ----- ----- ----
Total 90.8 86.2 +5.4 727
===== ===== ===== ====
Operating
Income 0.3 1.1 -68.7 3
===== ===== ===== ====
[As % of Sales] [0.4%] [1.3%]
Elimination
Net Sales (121.4) (123.3) (972)
======= ======= =====
Operating Income (16.4) (13.7) (132)
======== ======= =====
Total
Net Sales
Japan Y 687.1 Y 637.9 +7.7 $5,497
Overseas 402.6 433.8 -7.2 3,221
Unaffiliated
Customers 1,089.7 1,071.8 +1.7 8,718
Intersegment - - - -
Total Y 1,089.7 Y 1,071.8 +1.7 $8,718
========= ========= ==== ------
Operating Loss Y (42.3) Y (12.5) - $(339)
========== ========= ==== ======
[As % of Sales] [-3.9%] [-1.2%]
* Note: For purposes of comparison, 1Q FY2000 figures have been
restated to reflect 1Q FY2001 product composition for respective
business segments.
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