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Lacklustre telecom sector continues to hammer Fujitsu

Fujitsu warned the reluctance of large enterprise customers and telecommunication carriers to upgrade or invest in new equipment has hit its third-quarter results.

The company reported a 4% year-on-year drop in consolidated net sales to ¥1 trillion (£5.14bn) to 31 December, while operating losses and net losses both narrowed as a result of restructuring efforts.

Its consolidated operating loss was ¥13.1bn, down from ¥45.7bn the previous year, and consolidated net loss was ¥24.9bn, down from ¥106.1bn during the same period in 2001.

The root of much of Fujitsu's problems is its platforms group, which includes telecommunication and computer system sales and makes up roughly one-third of the company's sales. The overall domestic PC market contracted, telecom carriers continued to cut back on spending, and several large contracts that contributed to the sector last year were previously completed. As a result, sales in this sector dropped 21% to ¥352.8bn.

However, sales to the public sector helped boost software and services by 2% year on year to ¥419.8bn. The company also credited large government outsourcing deals in the UK for the rise, which managed to counter the effects of weakness in the financial and telecommunication sector.

Sales of electronic devices rose 31% year on year to ¥156.5bn as demand for chips for digital consumer electronics increased and the company shipped more flash memory chips, which are used in devices such as digital still cameras and digital music players.

Fujitsu revised down its full-year consolidated net sales forecast to ¥4.7 trillion from ¥4.8 trillion. It kept other forecasts for the full year unchanged: a consolidated operating profit of ¥100bn and a consolidated net loss of ¥110bn.

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