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Fujitsu Reports 1Q Loss But Projects Profit For Full Year

The Japanese vendor says slow sales of servers, telecom equipment, and hard drives are to blame for the continuing losses.
TOKYO (AP) -- Electronics maker Fujitsu on Tuesday reported a narrower first-quarter loss and said it was still on track to meet its profit projection for the fiscal year.

The Tokyo-based company posted a net loss of 39.8 billion yen ($334 million) for the April-June quarter, compared with losses of 56.4 billion yen in the same period last year.

Fujitsu said cost-cutting and other restructuring have helped improve its bottom line. But it cited slow sales of computer servers, telecommunications equipment, and hard drives for the continuing red ink.

Performance was also undercut by a weak stock market that boosted the company's pension obligations and a May earthquake in northern Japan that damaged a semiconductor plant, the company said. Those factors accounted for a combined extraordinary charge of 4.7 billion yen ($39.5 million).

Like other Japanese electronics companies, Fujitsu has been hammered by the global slump and competition from low-cost Asian rivals.

Fujitsu lowered its half-year forecast from a loss of 40 billion yen ($336 million) to 50 billion yen ($420 million), but said it was still on track to meet a full-year projected profit of 30 billion yen ($252 million) for fiscal 2003, on 4.8 trillion yen ($40.3 billion) sales.

Fujitsu said the first-half setback would be offset by sales orders for the second half that still match original expectations laid down in April.

Net sales dropped 4.5 percent to 938.7 billion yen ($7.89 billion) for the April-June quarter, the first in the Japanese fiscal year, from 983 billion yen last year.

Shares in Fujitsu closed down 21 yen (18 cents) at 547 yen ($4.60) on the Tokyo Stock Exchange on Tuesday, amid an overall down market.

Fujitsu has posted group net losses in the previous two years due to a steep drop in corporate spending on information technology.