Fujitsu: Profits under pressure

Fujitsu: Too optimistic, analysts say

Fujitsu, the Japanese chip and PC giant, has said it might have to reduce its expectations for annual profit because of falling semiconductor sales.

"We may have to downgrade our forecast," said senior vice-president Takashi Takaya. "Flash memory [for mobile phones] is causing the most concern."

Mr Takaya was responding to a report in the Nihon Keizei newspaper which said the company was likely to miss its operating profit target for the year by more than 25%.

Analysts have repeatedly said that Fujitsu's profit targets were too optimistic, particularly in light of the slump in the mobile phone sector.

Motorola, Yahoo bounce

Fujitsu shares hit a 33-month low earlier this week, having fallen about 30% this year.

However, the shares rose modestly on Thursday in line with a wider tech stock bounce following better than expected results from US companies Motorola and Yahoo.

The Nihon Keizei had said Fujitsu was in line to post annual operating profit of 200bn yen ($1.6bn), 26% down on the company's 270bn yen forecast made in April.

The chip making unit would record operating profit of just 40bn yen compared with a 89bn yen target, the paper added.

Fujitsu's Mr Takaya said the figures contained in the report were "speculation".

Canon

Also on Thursday, camera and office machine maker Canon increased its full-year profit forecast.

But the company, which also makes steppers used to etch circuits onto chips, slashed its forecast for stepper sales to 156.8bn yen from 250bn yen.

"We're seeing cancellations and postponements [of stepper purchases]," said Toshizo Tanaka, a senior managing director.

"In the second half we expect the semiconductor market will get worse, with a continued slowdown in the principal markets in Japan, the United States and Europe."