SCIENCE

TOKYO, JAPAN -- Fujitsu Limited today reported consolidated net sales of 1.09 trillion yen for the first quarter of fiscal year 2001 (April 1 - June 30, 2001), a 2% increase over the first quarter of fiscal 2000. Converted into US dollars(1), this represents approximately $8.7 billion. Higher domestic sales in telecommunications, as well as in information processing and services & software, were offset by lower overseas sales, particularly in the areas of telecommunications and information processing. In line with problematic economic conditions affecting the worldwide IT industry - including worsening stagnation in the U.S. economy and attendant slowdowns in Japan and East Asia as well as weaker growth in Europe - the Fujitsu Group faced a very difficult business environment in the first quarter. Poor economic conditions led telecommunications carriers in the U.S. in particular, as well as companies in other fields and regions, to cut back on capital spending, and IT-related investment dropped off precipitously. Moreover, worldwide demand for consumer-use personal computers and cellular phones leveled off, leading to widespread adjustments in production and inventories. In regard to earnings, higher sales of servers and other computing products countered sales declines in small form factor hard disk drives to improve overall results in information processing. However, electronic devices earnings were severely impacted by lower prices and a decline in demand as the market worked through excess inventory, and earnings for flash memory, logic ICs and SAW filters in particular suffered. Telecommunications earnings declined along with the drop in sales of optical transport systems in North America. As a result of these and other factors, Fujitsu reported a consolidated operating loss of 42.3 billion yen (US$339 million) for the quarter. In addition, due to charges associated with the reorganization of development operations in the U.S. and other restructuring measures, the company posted a net loss for the period of 55.4 billion yen (US$444 million).