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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Math Junkie who wrote (30568)	5/25/1999 8:53:00 AM
From: Duker	Read Replies (1) \| Respond to of 70976

Fujitsu, Toshiba in red, recovery seen (Adds company quotes, additional data) By Kiyoshi Takenaka TOKYO, May 25 (Reuters) - A slide in computer memory chip prices and a sluggish Japanese economy shattered the earnings of electronics giants Fujitsu Ltd and Toshiba Corp released on Tuesday -- but the companies said the worst may be over. Both firms incurred steep group net losses for the year just ended on March 31, but both forecast upturns for the current business year. ''We are out of the worst period,'' Fujitsu vice president Keizo Fukagawa told a news conference. ''Business is likely to remain slow in the first half (of the current business year), but it will still be better than the same period a year ago.'' Fujitsu suffered a group net loss of 13.64 billion yen ($111 million) last business year -- the first such loss in five years -- against a profit of 5.59 billion yen the previous year. The loss came largely from a 38.1 billion yen special loss in connection with changes in a project at its British unit ICL Ltd. Fujitsu's business was also hurt by a decline in prices of computer memory chips, known as dynamic random-access memory chips (DRAMs), and a fall in orders from Japanese telecom operators amid Japan's worst postwar recession. The mainstay information-processing sector, however, posted strong profit gains in services and software businesses, partially offsetting the weakness in other divisions. Following massive investments to shore up U.S. computer subsidiary Amdahl Corp and British unit ICL Ltd, its efforts to streamline its global information-processing business are finally beginning to pay off, a Fujitsu official said. Fujitsu, however, expects a group net profit of 80 billion yen for 1999/00 led by brisk overseas sales in the information-processing sector and an expected recovery in electronic devices sector both abroad and at home. Reflecting its positive business prospects, Fujitsu said it plans a group capital expenditure of 335 billion yen for the current business year, up 16 percent from a year ago. Fujitsu's aggressive strategy in the information-processing sector has made it a darling on Japan's stock market, where on Tuesday its stock ended up five yen at 1,965 yen. Warburg Dillon Read analyst Yoshiharu Izumi, who rates Fujitsu shares a ''strong buy,'' said the stock was well-positioned to recover from problems besetting Japan's electronics industry. Meanwhile, Toshiba posted a consolidated net loss of 13.9 billion yen in the last business year, plunging into the red for the first time in over two decades. This compared with a 7.3 billion yen profit the previous year, as losses in the chip and electronic component sectors weighed down earnings. Toshiba said a rebound in its mainstay notebook computer business, recovering in the United States after hitting a snag last year, helped wipe out a first-half loss, but that profitability in the business was falling amid intensifying sales competition. For the current business year it expects group net profit to increase to 25 billion yen. Toshiba's aggressive restructuring efforts and a flurry of tie-ups with the world's electronics giants sparked a rally in its stock price, which ended on Tuesday up 13 yen at 760. But analysts said it would take some time until the impact of restructuring filtered throughout the company. ($1=123 yen)