Fujitsu Ltd <6702.T> said its quarterly operating profit fell 35 percent, dragged down by losses in its devices business, sluggish IT spending in Japan and a strong yen, but it stuck to its full-year profit forecast on hopes for a pickup in IT spending in the October-March period.
Japan's largest IT services vendor, which trails IBM
Japan's corporate IT spending has been weak this year as a fragile global economy and a yen at record-high levels make exporters cautious about investment.
But rivals such as database vendor Oracle
The outlook is tough for our devices business, but if current IT demand continues, we will be able to meet our full-year forecast, Fujitsu Chief Financial Officer Kazuhiko Kato told reporters, citing solid orders for cloud computing and ubiquitous networks.
Fujitsu expects 135 billion yen (1 billion pounds) in operating profit in the year to March 2012, above a consensus estimate of 126 billion yen in a poll of 20 analysts by ThomsonReuters
Kato said that the Thai floods could cause a shortage of hard drives that could hurt its PC operations in October-December, but that Fujitsu would tap its own hard drive inventory and suppliers Seagate
One lesson we learned from the tsunami was to keep inventory, he said.
In the July-September quarter, Fujitsu booked an operating profit of 24.2 billion yen ($318 million), down from a 37.2 billion yen profit a year earlier.
Sales growth in infrastructure services, PCs, and audio and navigation equipment was cancelled out by the strong yen and losses in its electronic devices business.
But net profit jumped 50 percent to 26.2 billion yen, helped by lower tax costs after selling off shares in subsidiaries and spinning off operations in Europe, while sales edged up 0.6 percent.
However, Fujitsu trimmed its full-year sales forecast to 4.54 trillion yen from 4.60 trillion yen due to the yen's strength and weakness in its electronics devices business.
Shares of Fujitsu have dropped more than 26 percent since the start of the year. Prior to the earnings announcement on Wednesday, the stock closed the day up 2 percent, against the benchmark Nikkei average's <.N225> 0.2 percent decline.
(Reporting by Mayumi Negishi; Editing by Chris Gallagher)