OREANDA-NEWS.  January 31, 2012. Fujitsu today reported a consolidated net loss of 4.3 billion yen (USD 55 million) for the third quarter of fiscal 2011 (October 1 to December 31, 2011), representing a deterioration of 20.8 billion yen from the corresponding period of fiscal 2010. The impact of the Thai floods reduced net sales by 34.0 billion yen and operating income by 14.0 billion yen in the third quarter.

Third-quarter net sales totaled 1,079.7 billion yen (USD 13,842 million), down 1.5% from the corresponding period of the previous fiscal year. In Japan, sales rose by 3.8%. 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, such as mobile phone base stations, and sales of mobile phones, enabling overall sales in Japan to rise. Sales outside of Japan declined by 10.7%, and on a constant-currency basis sales fell by 5%. Sales of infrastructure services and server-related sales 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 on the part of carriers.

Fujitsu recorded operating income of 3.1 billion yen (USD 40 million), representing a deterioration of 18.1 billion yen compared to the third quarter of fiscal 2010. Progress has been made in achieving cost efficiencies throughout the group, although operating income declined due to a fall in sales resulting from the flooding in Thailand, the subsequent surge in prices of hard disk drives and other components, and the decline in sales of LSI devices and electronic components.

Fujitsu recorded 2.7 billion yen in restructuring expenses, reflecting a portion of the expenses incurred during the third quarter stemming from the decision to reorganize its Japan production operations of its car audio and navigation systems business, as well as expenses related to the streamlining of services businesses, mainly in Europe. In addition, deferred tax expenses increased, as tax code revisions lowered the effective tax rate.

Full-year financial projections have been revised downward in light of delays in a recovery in ICT spending inside and outside Japan, the impact of last October's floods in Thailand, and lower demand for semiconductors and electronic components.

"We are making solid progress in growing our cloud-related business and improving the profitability of our overseas ICT business," commented Masami Yamamoto, President of Fujitsu. "Losses from the Thai floods and from lower-than-expected market demand, however, forced us to revise our projections downward. Going forward, we will continue to pursue aggressive reforms to further develop a business structure that can better withstand fluctuations in the business environment."
Business Segment Results

Consolidated net sales in the Technology Solutions segment amounted to 686.1 billion yen (USD 8,796 million), down 4.5% from the third quarter of fiscal 2010. Sales in Japan were on par with the same period of the previous fiscal year. Sales outside Japan declined 11.3%. Excluding the impact of exchange rate fluctuations, sales decreased by 6%. The segment posted operating income of 25.9 billion yen (USD 332 million), an increase of 0.9 billion yen compared to the third quarter of fiscal 2010. Outside Japan, operating income increased as the result of improved profitability in the European services business.

Net sales in the Ubiquitous Solutions segment were 301.1 billion yen (USD 3,860 million), an increase of 4% compared to the same period in fiscal 2010. Sales in Japan increased 8.9%. Sales outside Japan declined 9.9%, and by 4% on a constant-currency basis."Operating income for Ubiquitous Solutions was 2.0 billion yen (USD 26 million), a decline of 1.6 billion yen from the same period of fiscal 2010.

Net sales in Device Solutions amounted to 138.1 billion yen (USD 1,771 million), a decline of 11.1% compared to the third quarter of fiscal 2010. Sales in Japan declined 12.1%. Sales outside Japan declined 9.5%. Excluding the impact of exchange rate fluctuations, sales declined 4%. The segment recorded an operating loss of 8.4 billion yen (USD 108 million), a deterioration of 16.8 billion yen from the third quarter of fiscal 2010.