Fujitsu Ltd’s group net loss for the year to March 31 masks a recovery that was reversed only by meeting heavy restructuring outlays at its Amdahl Corp affiliate, where it holds around 44%. At the pre-tax level, the company made a consolidated profit equivalent to $422m against a loss last time of $155m. On an unconsolidated or parent company basis, Fujitsu also rebounded to profitability, despite weak sales of its computer products, on the strength of cost cutting. The company succeeded in slashing sales and general administrative expenses by 13% and its cost of sales by 9.9%, which more than cancelled out the 9.4% slump in overall sales. A drastic cutback on capital investments, research and development costs and inventories is part of the reason for the earnings recovery, Fujitsu executive director Keizo Fukagawa told a news conference. Sales of mainframe computers, which constitute 70% of Fujitsu’s total computer sales, fell 14.1% to $14,500m in 1993-94, he said. But the company forecasts that current profits will more than double this year to $596m. Elsewhere the bright spot for NEC Corp, Hitachi Ltd, Mitsubishi Electric Corp and Toshiba Corp was surging sales of chips to US manufacturers. All five companies forecast higher profits for 1994-95, predicting further increases in sales of semiconductors and liquid crystal displays, as well as that long-running chimera, recovery in the Japanese economy. NEC’s computer sales dropped 0.4% to $14,100m. Sales of semiconductors and other components rose by 10% to $5,280m. It forecasts profits of $480m this year. Toshiba’s semiconductor sales rose 6% to $7,010m, partially making up for poor sales of consumer electronics. Toshiba is forecasting a recovery in current profits this year to $576m.
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