Restructuring costs relating to Fujitsu’s semiconductor business have pushed the firm into deep losses for Q3 FY12. For the three months to end December 2012, Fujitsu reported a consolidated net loss of 79 billion yen ($908m). As part of the restructuring process, Fujitsu announced today that it has signed a memorandum of understanding with Panasonic Corporation to consolidate their semiconductor design and development functions.
Fujitsu also outlined further measures to improve its operational efficiency. These include transferring (i.e. into the new joint Panasonic venture) and reducing staff resources, and cutting corporate headquarter costs. In the UK, a special contribution to the pension fund is to be made to address retirement benefit obligations.
In terms of the top line performance, third quarter consolidated net sales were 1,048.2 billion yen ($12.048b), a decline of 2.9% on the same period in FY11. The Services business overall faired relatively well with Systems Integration and Infrastructure Services both growing 2% at constant currency. However, Infrastructure Services sales fell by 1% (constant currency) outside of Japan, impacted by cutbacks in corporate spend and the general macroeconomic climate in Europe.
For the year as a whole, Fujitsu has revised its outlook downwards for both revenue and operating income. In Q4 it expects to incur additional restructuring expenses associated with structural business reforms.
Comment from Richard Holway
I understand that the UK is continuing to see a shift from public to private sector revenues which Duncan Tait initiated/continued on his promotion. That should see ‘flat’ revenues for the year. Given the ‘problems’ they have had with certain contracts in the public sector, in the circumstances, that’s quite an achievement.
The ‘problem’ I have with Fujitsu is two-fold. Firstly, whenever I dig I find wondrous product and innovation which never seems to get exploited. It’s almost as if they do it for the intellectual satisfaction rather than to actually sell the stuff. Have you seen their smartphone and tablet? Thought not.
Secondly, I’ve used the phrase ‘To be reborn, first you have to die’ many times recently. Fujitsu has too many ‘irons in the fire’. It has had many opportunities to dump its ‘legacy’ bits and concentrate on the new stuff. But it always seems to duck the decision. Although today’s announcement on the semiconductor side is welcome it is too little and too late. Anyway there are other divisions which also need urgent attention.
ICT/ICL runs through my blood. That’s where I learned PLAN, Cobol and Fortran back in the 1960s. Many readers will also have some of this ‘blood’ too. That’s why I still have a soft spot for the UK bits of the old firm and really do ‘wish them well’.