Fujitsu Limited, a leading provider of IT-based business solutions for the global marketplace, today reported consolidated operating income of 13.3 billion yen (US$147 million*) for the first nine months of fiscal 2008 ended December 31, 2008, as higher profitability in the Technology Solutions business buoyed the company amid a decline in demand for semiconductors and mobile products.

Consolidated net sales in the nine-month period totaled 3,507.6 billion yen (US$38,546 million), a decline of 7.9% compared to the same period in fiscal 2007. Excluding the impact of the yen’s appreciation, net sales decreased by 3%. The company reported a net loss of 36.1 billion yen (US$397 million) for the nine-month period compared with a net loss of 3.8 billion yen in the same period of fiscal 2007, due to one-time charges and higher non-operating losses.

Operating income from the mainstay Technology Solutions business, which includes IT services, system products and telecommunications equipment, grew 6.3% for the nine-month period to 77.6 billion yen (US$853 million) on higher sales of systems integration services and telecom equipment, along with greater cost efficiencies. Services sales grew 4.8% in Japan, and outside Japan sales rose 4% when excluding the impact of yen appreciation. The strong performance in IT services in Japan was due largely to solid systems integration orders from the public and healthcare sectors.

Volume product areas, such as PCs, mobile phones, hard disk drives (HDDs), and electronic devices were negatively impacted by increasingly severe market conditions brought on by a general downturn in consumer spending and intensified price competition.

On a geographic basis, nine-month net sales in Japan declined by 2.3% while sales outside Japan fell 17.0% due in part to the rapid appreciation of the yen in the third quarter.

“Our business operations remained profitable despite a harsh economic climate,” said Fujitsu Limited President Kuniaki Nozoe. “We’ve proven that we can consistently generate profits in the IT services business, but overall we’re not satisfied with the results. I’m confident that the measures we take in the coming months will put us in a better position to grow once the global economy turns the corner.”

For the October-December 2008 third quarter, the company reported consolidated net sales of 1,053.8 billion yen (US$11,581 million), an operating loss of 25.1 billion yen (US$277 million) and a net loss of 40.7 billion yen (US$447 million).

In a separate release:

Fujitsu Limited announced today that it has revised its consolidated earnings projections for fiscal 2008, previously announced on October 29, 2008.

The projection for full-year net sales has been lowered by 350.0 billion yen to 4,700.0 billion yen. The revised projection takes into account the deteriorating market conditions and intensified competition in the PC, mobile phone, hard disk drive (HDD), logic LSI device, and electronic component markets. In addition, since the beginning of the third quarter, the yen has continued to appreciate in value. Therefore, the projected average exchange rates for the US dollar, euro, British pound and other currencies for the second half of the fiscal year have been revised, resulting in a projected 100.0-billion-yen decline in net sales.

The projection for full-year operating income has been lowered by 100.0 billion yen to 50.0 billion yen. The projection was revised due to the decline in sales of PCs, mobile phones, HDDs, logic LSI devices, and electronic components, along with the impact of the yen appreciation.

The company now projects a full-year net loss of 20.0 billion yen. Non-operating losses of 25.0 billion are expected from valuation losses on investment securities and losses related to facilities and equipment.

This estimate includes expected losses of approximately 10.0 billion yen incurred from the consolidation of logic LSI device production lines in the fourth quarter.