Fujitsu Ltd <6702.T>, Japan's biggest IT services firm, nearly quadrupled its annual net profit forecast after it unloaded shares in industrial robot maker Fanuc Ltd <6954.T> for 89 billion yen ($945 million), parrying speculation that it needs to raise capital.
Fujitsu, which is chasing bigger rivals IBM
The share sale is a windfall for Fujitsu, whose executives have denied the possibility of a share issue to raise funds to restructure its loss-making chip operations and expand its presence in IT services abroad.
The sale lifted Fujitsu's annual earnings forecast to a net profit of 95 billion yen from its previous forecast of 25 billion yen, and far above the average 23 billion yen estimate by 14 analysts polled by Reuters.
Fujitsu is probably relieved to have a thicker cushion of capital, said Yukihiko Shimada, an analyst at Mitsubishi UFJ Securities.
Shimada said he wouldn't rule out a similar sale of other Fujitsu shareholdings down the road, but noted that Fanuc represented the most valuable part of Fujitsu's stockholdings in a firm that wasn't a subsidiary.
I don't think there is a pressing need for a similar share sale in the future, he said.
Shares of Fujitsu rose 1 percent in heavy trade, while Fanuc dropped 1.7 percent. Almost 25 million Fujitsu shares changed hands, double their daily average.
Other firms in which Fujitsu is a major shareholder fell, including Fuji Electric <6504.T> and Advantest Corp <6857.T>. Fujitsu also has a large stake in unlisted Japan Electronic Computer Co Ltd.
Fanuc, Japan's first maker of numerical control machines, was hived off from Fujitsu in 1972. Fujitsu has gradually sold its stake in Fanuc, which once stood at 38.9 percent, as it shifts its focus away from hardware to IT consulting abroad.
Fujitsu has been unsentimental about parting with non-core technology in the past, backing out of plasma and liquid crystal displays, whose key technology it pioneered.
The world's No.4 IT services provider after IBM, HP and Dell
Given dwindling growth in Japan, Fujitsu is looking abroad as the sector goes through a series of shake-ups, including Oracle's
It won its first major outsourcing contract in the U.S. in June and has also acquired Telstra Corp's
Fujitsu had a shareholders' equity ratio of 22 percent at the end of June, on par with rival NEC Corp <6701.T>, which sources have told Reuters is considering raising about $2.1 billion.
The Fanuc shares were sold at Thursday's closing price of 7,460 yen through the Tokyo Stock Exchange's off-hours share buyback platform.
Shares of Fuji Electric fell 1.1 percent and Advantest lost 2.6 percent.
(Editing by Chris Gallagher)