Fujitsu losses mount on restructuring cost


Fujitsu, Japan's leading computer maker, posted a consolidated net loss of 56.4 billion yen for the June quarter

TOKYO, Japan -- Computer and chip maker Fujitsu on Friday blamed restructuring costs as it posted a net loss of 56.43 billion yen ($481 million) for the June quarter.

The loss was 1.8 percent worse than last year. Sales also fell, down 9.8 percent to 983 billion yen ($8.4 billion).

The company lowered its sales expectations for this business year by 200 million yen. Fujitsu now sees sales of 5 trillion yen ($42.6 billion) for the 12 months through March.

That would be a decline of 3.8 percent compared with last year's sales.

However, Fujitsu stuck by its profit forecast to break even this year, a drastic improvement from its net loss of 382.54 billion yen for the last fiscal year in March.

Fujitsu shares fell 5.25 percent to 729 yen as tech stocks took a battering on Tokyo's benchmark Nikkei Index.

The Nikkei closed at 9,591.03 on Friday, a fall of 3.41 percent, amid an Asian selloff. (full story)

Restructuring costs and WorldCom to blame

Fujitsu raised restructuring costs by 50 percent, to 60 billion yen for the year. The company spent 30 billion yen in the first quarter alone.

As part of its restructuring, Fujitsu recently changed a long-standing policy to give retired executives a high-ranking position at a subsidiary company. (full story)

Fujitsu is also one of Japan's largest makers of telecom-infrastructure equipment. It saw a 46 percent drop in revenues for the first quarter for transmission equipment.

The company said it stands to lose about $20 million in orders from U.S. long-distance carrier WorldCom Inc, which filed the world's biggest bankruptcy last Sunday (full story).

The WorldCom scandal may also cast a pall over telecom infrastructure spending in the United States, where Fujitsu pulls in much of its networking business.

In a statement released today by the company, Fujitsu said that it foresaw lower-than-expected sales for its services software, especially overseas.

Anticipates growth in microchip sales

Fujitsu predicts stronger sales for its chip operations. It nudged its full-year revenue forecast up to 380 billion yen ($3.2 billion), from 370 billion.

Fujitsu is Japan's fifth-largest chip maker. Its positive outlook comes after the world's largest contract chip maker, Taiwan's TSMC, warned shipments would drop in the current quarter, sending Japanese semiconductor shares tumbling. (full story)

Reuters contributed to this report.