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Fujitsu aims to double profit next year

Fujitsu aims to double profit next year
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First Published: Thu, Jul 23 2009. 03 23 PM IST
Updated: Thu, Jul 23 2009. 03 23 PM IST
Tokyo: Fujitsu Ltd, Japan’s biggest IT services company, said on Thursday it aims to more than double its operating profit next year after restructuring its operations and expanding overseas revenues.
Fujitsu, which is trying to catch up with bigger rivals IBM and Hewlett-Packard, aims to boost its operating profit to 200 billion yen ($2.1 billion) for the year ending March 2011, up from a forecast 80 billion yen this year and far above the 132 billion yen consensus of 14 polled analysts.
The news sent Fujitsu’s shares up 3.4% yen, while the benchmark Nikkei average rose 0.7%.
The effects of a planned sale of its hard drive business to Toshiba Corp, restructuring its chip operations and its April acquisition of Siemens’s share of a PC joint venture will kick in next year, president Kuniaki Nozoe told a news conference.
Fujitsu’s loss making system chip operations would also become profitable as early as October-December and earn an annual profit next year on lower fixed costs, he said.
Nozoe set out a goal of an operating profit of 250 billion yen and an operating profit margin of more than 5% in the year ending March 2012 - a modest target compared with double-digit margins at its overseas rivals.
Japan’s biggest computer server vendor aims to grab more than 40% of its sales from outside Japan in three years’ time, desperate to free itself from a sluggish market at home and to tap the the world’s biggest IT services market in the US.
But this year is set to be tough. Orders for Fujitsu’s IT solutions business fell sharply in June, following promising signs of growth in April and May, Nozoe said.
“We are not counting on strong IT investment this year,” he said.
Fujitsu, whose operating profit halved in the quarter ended on 30 April logged an operating profit margin of 1.5% last year as it grappled with stiff price competition in hard drives, PCs and servers.
That missed a previously stated midterm target of 4.1%.
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First Published: Thu, Jul 23 2009. 03 23 PM IST