Two numbers sum up Fujitsu – Y4,660 and Y295. The first is the Japanese electronics conglomerate’s share price from 12 years ago. The second is Monday’s share price. That is the definition of a company in crisis. Ominously for investors, there was nothing in the group’s first-quarter results to suggest that it has reached rock bottom.
Granted, a strong yen and weak overseas demand are hurting most of corporate Japan. Data on Monday showed that the country’s industrial production has fallen for the third month in a row, against the forecast of a small uptick. Even so, Fujitsu cannot blame the wider economy solely for its woes. It remains marooned in maturing commodity products such as mobile phone technology, microchips and PCs. It is hardly any wonder that the company’s revenue decline has continued for five consecutive years.
Fujitsu’s first-quarter performance was clobbered by weak demand for its PCs in Europe as well as system chips used in televisions and servers. Falling orders for telecom infrastructure from US carriers will not help either. Capital expenditure in Japan is helping demand for its network products; as Japanese companies globalise, so some IT spending has been buoyed. But that did little to offset the Y25bn of group operating losses during the three months to the end of June.