Jan 27, 2003 (07:01 PM EST)
Cost Cuts Help Fujitsu Reduce Losses
Read the Original Article at InformationWeek
TOKYO (AP)--Fujitsu Ltd. posted narrower losses Tuesday in its third quarter largely because of cost cuts that offset dropping sales, but the Japanese electronics maker lowered its sales forecast for the year.
Fujitsu's net loss for the period ended Dec. 31 totaled 24.9 billion yen ($210 million), far smaller than the 106 billion yen loss in the same quarter a year ago.
Sales fell 4% to 1.02 trillion yen ($8.6 billion) from 1.06 trillion yen a year ago, as cutbacks by telecommunications carriers and a downturn in computer systems sales chipped away at revenue, the Tokyo-based company said.
Like other Japanese electronics and computer companies, Fujitsu is continuing to suffer from the global slump that followed the burst of the dot-com bubble.
Although the plunging price of computer chips continued to hurt earnings, a rebound in Asian markets and inventory adjustments helped boost the company's sales of electronics devices for the quarter by 31%, it said.
"The losses are smaller than we had expected," said senior executive vice president Takashi Takaya.
Although the recent recovery in Asian economies offers some hope, consumer spending and corporate investments remain sluggish, Fujitsu said.
Delays in fixing the bad debt problem at Japanese banks have pushed down the stock market, and prospects for corporate profits remain dubious, it said.
Fujitsu revised its sales forecast for the fiscal year ending in March to 4.7 trillion yen ($39.5 billion) from the 4.8 trillion yen ($40.4 billion) predicted in October.
It kept its net-loss forecast for the year unchanged at 110 billion yen ($926 million), promising that cost cuts will be able to absorb the reduction in sales. That will be an improvement over the 383 billion yen loss the company suffered in fiscal 2001.
Fujitsu already booked restructuring charges in the first half, including trimming thousands of jobs. The extraordinary loss for the latest quarter totaled 7 billion yen ($59 million), which was caused by a drop in the value of the stocks the company owns.
Fujitsu did good business in cooperating with Tokyo's effort to spread computer use in national and local governments and posted steady gains in sales of services to the government.