The first half of Fujitsu Ltd’s financial year saw profits plunge 46% to $62m from $113m last time on revenue which inched up 7% to $17.87bn from $16.76bn last time. Japan was largely to blame. Earnings per share were $0.03 versus $0.06 last time. The company’s communications business saw the biggest fall off with revenues down 20% to $2.6bn from $3.24bn. Computers and information processing systems rose a healthy 17% to $12.48bn from $10.69bn, while semiconductor revenue came in down 2% at $2.11bn from $21.46bn and other operations declined 1% to $678m. Margins declined 1.4% compared with last time, which Fujitsu attributes to softness in the Japanese telcomms sector and depressed memory prices. Sales to international telco markets were strong, especially internet-related sales to the US, the company says, up 32%. Software and services grew fast but again international system sales growth of 56%, far outpaced the Japanese markets. The numbers also now account for its Amdahl and ICL businesses. Strong PC and disk sales offset sluggish client/server sales at home, it says. Similarly, strong US demand couldn’t offset pricing weakness in the semicondcutor markets. Fujitsu says PCs and software and services will be the brightest spots in the second half of the year. US and European telecoms sales should be strong, but again, not enough to offset weakness in its home market. Semiconductor weakness will continue, it notes, so it will attempt to turn that boat around by taking some drastic action beginning in its fiscal 1999 to get it back into the black. One of its obselete fab lines in Japan will be shut down but it will also invest $70m to upgrade its Oregon-based 64Mbit DRAM plant to produce large-scale integration chips and other memory. DRAMs are 20% of Fujitsu’s semiconductor business now and it will shrink that to between 10% and 15%. Fujitsu projects sales will rise 8% for the full year to $40bn while income will be flat at around $333m. Figures converted at 135 yen to the dollar.
