Wednesday, October 28, 2009

Fujitsu Q2 Beats Expectations, Keeps Outlook

. Wednesday, October 28, 2009

By stockOzone team

Fujitsu Ltd (6702.T), Japan's biggest IT services firm, reported a smaller-than-expected fall in quarterly profit on Wednesday thanks to cost cuts, and stuck to its annual outlook.

Fujitsu, which is chasing bigger rivals IBM (IBM.N) and Hewlett-Packard Co (HPQ.N), kept its forecast for a 90 billion yen ($985 million) operating profit for the full year to next March, above the 70.8 billion yen average estimate from 14 analysts polled by Thomson Reuters I/B/E/S and up 30 percent from the previous year.

The world's No.4 IT services provider is hurrying to shed non-core operations as the sector goes through a series of shakeups, including Oracle's (ORCL.O) purchase of Sun Microsystems (JAVA.O), amid increasing competition.

In its quarterly results, IBM earlier this month reported a fall in total signups for its consulting and system integration business and in its technology services business, while Accenture (ACN.N) also said consulting revenues had fallen.

Fujitsu, which trails IBM, HP and Dell (DELL.O) in IT services, reported an operating profit of 18.9 billion yen for July-September, down 42 percent from a year ago but narrowly beating a consensus estimate for a 17.4 billion yen profit.

Its net profit jumped to 72.5 billion yen from 4.3 billion yen a year earlier, on an 11 percent decline in sales.

Japan's sole remaining maker of supercomputers sold its loss-making hard drive business to Toshiba Corp (6502.T) earlier this month as it shifts focus on IT consulting overseas instead of dwindling growth in Japan.

Prior to the announcement, Fujitsu's shares ended the day down 0.2 percent at 557 yen, outperforming Tokyo's electrical machinery index .IELEC.T. Its shares gained 12 percent in July-September, outperforming a 6 percent rise in the index. ($1=91.34 Yen) (Reporting by Mayumi Negishi; Editing by Michael Watson)

Disclosure: Author does not own any of the stocks discussed here.

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