Fujitsu warns of first loss since listing in 1949

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The Independent Online
FUJITSU, the Japanese electronics giant, has warned of a 10bn yen ( pounds 40m) loss in the first half of this year, its first since the company was listed in 1949. Fujitsu, which controls ICL of the UK, made a profit of Y31bn in the first half of last year.

Fujitsu is struggling against a continuing depression in the worldwide computer and semiconductor markets. The company said, however, that group pre-tax profits could rise to Y80bn in the year to March 1993, compared with Y51bn last year.

A spokesman for the company said: 'Although demand has started showing signs of recovery, this will not be reflected in the first-half profit results'.

On Tuesday, Fujitsu announced the closure of a computer chip manufacturing plant in San Diego, California. The company said it was ceasing all production because of the downturn in the economy and competitive pressure.

Earlier in the year Fujitsu warned that market conditions at home and abroad were weaker than had been expected and said it would be seeking to cut spending. But it said that any cuts would not affect ICL, in which it has an 80 per cent stake.

Fujitsu has been hit by year-on- year falling sales of computers and related equipment in industrial and commercial markets. Meanwhile, over-capacity in the computer and semiconductor industries has depressed prices.

At the same time, the drive for more sophisticated goods has shortened product lives and made it harder for manufacturers to make a healthy return on investments. Industry analysts have warned that several large Japanese companies may now face the consequences of investing heavily to keep a lead in the technology race.

Fujitsu is regarded as being vulnerable because it is relatively narrowly focused on electronics and computers. Rivals such as Hitachi and Toshiba are also leading players in heavy electrical industries.

In May, Fujitsu, NEC, Toshiba, Hitachi and Mitsubishi Electric announced group falls in profits ranging from 33 per cent to 65 per cent for the year ended in March. Most of the Japanese companies hope the US economy will improve in the second half of the year to boost business at a time when information technology sales are traditionally stronger.