Fujitsu Limited

euro adhoc: Fujitsu Limited
Quarterly or Semiannual Financial Statements
Fujitsu Reports FY2003 First Quarter Financial Results Lower Sales Posted, But Orders In Line With Expectations (E)

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            Fujitsu Reports FY2003 First Quarter Financial Results

          Lower Sales Posted, But Orders In Line With Expectations

Tokyo, July 29, 2003 - Fujitsu Limited, a leader in customer-focused IT and communications solutions for the global marketplace, today reported consolidated net sales of 938.7 billion yen, approximately US$7.8 billion*, for the first quarter of fiscal year 2003 (April 1 -June 30, 2003), a 4.5% decrease from the first quarter of fiscal 2002.  Lower sales of platforms products and other factors contributed to the overall decline in sales.  While the company is reaping the benefits of lower fixed costs stemming from the restructuring initiatives implemented last year, the impact of lower sales resulted in an operating loss of 37.8 billion yen.

Weakness in the equity market led to higher pension obligation expenses and damages sustained in an earthquake that occurred off the coast of Miyagi Prefecture in May resulted in an extraordinary charge of 4.7 billion yen.  These items, however, were offset by a turnaround in equity in earnings of affiliates to 1.8 billion yen and a 26.9 billion yen gain on sales of marketable securities resulting from the sale of a portion of the company's shares in Fanuc.  The consolidated net loss was 39.8 billion yen, representing a narrowing of the first quarter loss in the previous year of 56.4 billion yen.

To date, Fujitsu's sales orders are in line with anticipated levels, and the company's financial projections for the full year remain unchanged.

Results by Business Segment

1. Software & Services

                          Three months ended June 30

                                      FY2003                          Change
Net Sales                  (Billion Yen)                FY02 to FY03
Japan                                266.0                              +4.2%
Overseas                          117.2                            - 6.7%
Total                                383.3                              +0.6%
Operating Profit                (3.6)                            -4.5 billion yen

Net Sales
Solutions/SI                    154.8                              +6.1%
Infrastructure Services  228.5                              -2.8%

In Japan, although IT spending overall remained sluggish, the company achieved a 4% sales increase due to strong sales in the government, manufacturing and healthcare sectors, compared to the first quarter of fiscal 2002.  Sales in the U.S. decreased, reflecting the overall weakness in IT spending.  In the U.K., however, last year's sale of unprofitable businesses resulted in improved profitability, although sales were lower compared to the previous year.  Profitability in this segment deteriorated in the first quarter as a result of seasonal factors impacting sales, weak market conditions, and higher expenses associated with Linux development costs and other factors.

Solutions/Systems Integration

Sales of solutions and systems integration services increased, bolstered by continued strength in the public sector field in connection with the roll-out of the e-Japan initiative and sales of solutions, such as supply chain management and enterprise resource planning software, such as GLOVIA, particularly to manufacturers that are expanding their global operations.  An increase in marketing expenses for solutions, however, held operating income at a level roughly equivalent to last year's results.

Infrastructure Services

The company posted lower sales of infrastructure services in the first quarter. The corporate outsourcing business had a strong quarter, but sales of server-related software & services remained weak.  As broadband network infrastructure has grown more pervasive, the market for corporate network services is expanding, but price competition is also intensifying, putting pressure on profit margins.

At U.K. subsidiary Fujitsu Services, the decision to exit unprofitable businesses last year has resulted in lower sales but a sharper business focus. That sharper focus, along with contributions from new orders from the government associated with the private finance initiative, has returned that unit to profitability.

FY2003 Earnings Projections for Software & Services

                                         FY2003                 Change
                                 (Billion yen)        FY02 to FY03
Net Sales                        2,120.0                      +4.7%
Operating Profit                190.0                    +13.4 billion yen

Solutions/SI                  1,015.0                      +7.9%
Infrastructure
Services                         1,105.0                      +1.8%

The spread of broadband networking clearly expands business opportunities for Fujitsu in this sector, and the company is well-positioned to take advantage of these trends.  In overseas markets, while circumstances differ depending on the individual operating entity, the company anticipates being able to meet the earnings projections announced at the start of the fiscal year. While there is some concern over the intensified price competition accompanying the market shift toward open standards, the company is also optimistic about its plans to release a stream of new software & services products linked with new hardware offerings under its TRIOLE IT infrastructure initiative.  Taking these factors into account, Fujitsu's earlier earnings projections for the full year remain unchanged.

2. Platforms

                                                      Three months ended June 30

                                                 FY2003                 Change
                                          (Billion Yen)          FY02 to FY03
Net Sales                                  312.2                  -17.6%
Operating Income (Loss)            (19.4)                  -6.4 billion yen

Net sales by product segment      FY2003                Change (%)
                                              (Billion Yen)        FY02 to FY03
PCs & Mobile Telephones                140.0                 -7.0
Telecommunications                         73.7                -19.1
(Transmission Equipment)              (36.4)            (-23.5)
Servers                                          65.1                -30.4
HDDs                                                33.3                -23.8

The company posted strong sales of consumer PCs, and the strong yen also helped to contain costs.  In mobile phones, a delay in the shipment of a new model until July resulted in lower sales than projected in the company's initial plans in April.  In optical transmission systems, sales of earlier models of equipment in the U.S. and other markets declined sharply, but the effect of lower fixed costs stemming from the restructuring efforts implemented last year helped to trim operating losses.

In servers, although sales in overseas markets are growing, large-scale orders in Japan from such sectors as telecommunications and finance were minimal, leaving overall sales sharply lower compared to the first quarter of last year.

Sales of small form-factor hard disk drives declined, in part because of delays in shipping new models of hard drives for servers, but the operating loss has been reduced by the impact of lower fixed costs resulting from last year's restructuring initiatives.

FY2003 Earnings Projections for Platforms

                                                    FY2003              Change
                                                (Billion Yen)    FY02 to FY03

Net Sales                                      1,610.0          -0.1%
Operating Income                                15.0          +14.0 billion yen

In PCs, by getting a jump on competitors in introducing new summer models with improved audio-video functions, Fujitsu was able to increase both unit shipments and market share.  While the increase in shipment volumes is expected to carry through for the full year, the company also anticipates intensified price competition, and therefore projections for operating income remain unchanged.

In mobile phones, although there was a delay in shipping a new handset model equipped with a high-resolution camera, that model will be introduced in the second quarter, and the company expects to meet its original projections for sales and unit volume shipped for the full year.  With respect to profitability, although unit volumes will increase, there are also higher production costs associated with more sophisticated product functions, the impact of which is already reflected in the company's projections.

In transmission systems, with a delayed recovery in capital spending among both foreign and domestic telecom carriers, the company anticipates that sales will be lower than last year's levels.  On the other hand, in North America, shipments of the next generation optical transmission equipment for Verizon Communications and other telecom operators are materializing, and, with the impact of lower fixed costs stemming from last year's restructuring, the company anticipates a substantial narrowing of operating losses.

In servers, while shipments of new models have been strong in Europe, those in the U.S. have been slower than anticipated.  In the second quarter, volume shipments will begin in Japan for a new low-priced server based upon Fujitsu's new TRIOLE IT infrastructure, which will enhance the company's ability to deal with price competition and is expected to make a solid contribution to sales and operating income.

In small form-factor hard disk drives, shipments for notebook PCs are strong, and the business unit is expected to return to profitability for the full year.

3. Electronic Devices

                                                 Three months ended June 30
                                            FY2003                         Change
                                        (Billion Yen)            FY02 to FY03
Net Sales                                162.6                         +14.5%
Operating Income (Loss)          (6.1)                         +1.2 billion yen

Net sales by product              FY2003                      Change(%)
segment                            (Billion Yen)              FY02 to FY03
Semiconductors                         90.3                         +14.3
Others                                      72.3                         +14.9

Fujitsu has had a flash memory joint venture with U.S.-based Advanced Micro Devices, Inc. (AMD), and to realize greater efficiencies and strengthen their competitiveness in this sector, the two companies have decided to integrate their operations, including marketing and R&D.  Toward that end, on June 30 the two companies established a new joint venture, with Fujitsu's equity share at 40% and AMD's at 60%, into which both companies have transferred their entire flash memory operations, including their production facilities.  With integrated operations extending from R&D to production dedicated solely to the flash memory market, the new venture will have the focus and responsiveness required to succeed in this market.  This transaction had no impact on the company's consolidated earnings for the first quarter.

The earthquake that occurred off the coast of Miyagi Prefecture on May 26 inflicted damage to the semiconductor production facilities at the company's Iwate plant.  While the facility has been restored to full production, the company incurred a 4.7 billion yen casualty loss as an extraordinary charge in the first quarter.  The temporary disruption to production has affected sales and profitability for the first and second quarters.

First quarter sales in this sector overall rose sharply, increasing 14.5% over the same period in the prior year.  Although damage from the earthquake had an adverse impact on a portion of sales, sales of semiconductors were up sharply, particularly of chips used in digital audio-visual equipment and mobile phones. Sales of plasma display panels also posted a substantial increase, buoyed by growing demand for plasma display televisions.

The operating loss for the first quarter narrowed by 1.2 billion yen compared to the previous year.  Although results were adversely affected by lower prices in some product lines, the positive impact of higher sales, lower fixed costs stemming from previous restructuring initiatives, and stabilized profitability in the plasma display panel business contributed to the sector's improvement.

FY2003 Earnings Projections for Electronic Devices

                                      FY2003                            Change
                                 (Billion Yen)                 FY02 to FY03
Net Sales                          710.0                          +14.8%
Operating Income                 15.0                            +46.6 billion yen

Full-year projections for sales and operating income remain unchanged.  While there is some uncertainty regarding market price trends for some products, the markets for end-products such as PCs and mobile phones equipped with a high-resolution camera are recovering, so the company anticipates a rising trend for sales of semiconductors and semiconductor parts.  The company also anticipates a continued strong market for plasma display panels.

Balance Sheet Summary

Total assets at the end of the first quarter were 4,056.2 billion yen, a decrease of 169.1 billion yen compared to the end of the previous fiscal year. A reorganization of the company's flash memory operations and lower trade receivables were the two main factors behind the decrease.

Total current assets were 1,973.8 billion yen, down 97.8 billion yen from the end of the last fiscal year.  Inventories increased by 50.6 billion yen, to 646.5 billion yen, partly as a result of the delay in shipping a new mobile phone model until the second quarter, and partly in anticipation of higher sales starting in the second quarter.  Trade receivables declined by 166.1 billion yen, to 674.2 billion yen, reflecting the seasonal effect of a concentration of sales in the fourth quarter, generating higher trade receivables, with collection of these receivables during the first quarter.

Total fixed assets were 2,082.4 billion yen, a reduction of 71.2 billion yen compared to the end of prior fiscal year.  Property, plant and equipment declined by 106.5 billion yen, to 884.0 billion yen, and investments and long-term loans increased by 40.2 billion yen, to 941.7 billion yen.  These changes primarily reflect the shift in the accounting treatment of the company's flash memory operations to the equity method, in accordance with the new joint venture status.

Total liabilities were 3,201.6 billion yen, a reduction of 106.7 billion yen compared to the end of the previous fiscal year.  The reduction is primarily attributed to a 128.4 billion yen reduction in trade payables.

Total shareholders'equity declined by 22.9 billion yen, to 679.4 billion yen. Higher equity prices resulted in an increase in unrealized gains on securities, but this was offset by the company's net loss.  Because, proportionally, assets contracted by more than shareholders' equity, the shareholders' equity ratio increased by 0.2%, to 16.8%.

Total interest-bearing liabilities increased by 64.3 billion yen, to 1,828.1 billion yen, primarily as a result of posting a net loss and a temporary increase in inventories.

Summary of Cash Flows

Net cash generated by operating activities in the first quarter was negative 85.9 billion yen.  There was a narrowing of the loss before income taxes and minority interests compared to the first quarter of the previous year, and a decline in trade receivables through collections.  But these factors were offset by the temporary increase in inventories in anticipation of higher sales starting in the second quarter and a decrease in trade payables.

Net cash generated from investing activities was 5.5 billion yen, a 58.9 billion yen improvement compared to the first quarter of the previous year.  This improvement resulted from keeping capital expenditures within amount of the depreciation charges taken and the sale of marketable securities.

Therefore, free cash flow was negative 80.3 billion yen, an improvement of 67.3 billion yen compared to the prior year.  The negative free cash flow was funded through increased borrowing, primarily through the commercial paper market, and net cash generated from financing activities was 69.7 billion yen.  The net decrease in cash and cash equivalents was 9.7 billion yen.

Initiatives to Strengthen Fujitsu's Financial Condition

Fujitsu is undertaking a number of initiatives to wring operating efficiencies out of its core businesses while raising their capacity to generate strong earnings.  For example, particularly in its domestic operations, Fujitsu is redoubling its focus on quality manufacturing.  It is also organizing its global supply chain management activities for servers, PCs and other hardware around four operation centers in Japan, Singapore, Germany, and the U.S.  In addition, it is making organizational changes to enhance its ability to provide services and support to global customers in Japan, North America, Europe, and other Asian markets.

Starting in the second quarter, the company is implementing plans to reduce inventory levels and take other actions designed to enhance the efficiency of asset utilization.  Through these measures, by the end of this fiscal year Fujitsu plans to reduce interest-bearing liabilities to a level no greater than 1,500.0 billion yen.

The company intends to quickly restore the strength of its balance sheet by utilizing its existing assets in the most effective manner possible, while restoring the profitability of its businesses.

Earnings Projections for FY2003

Although the disruption in production at one of the company's semiconductor production facilities resulting from the earthquake caused a temporary setback, at present the company's sales orders match the levels anticipated in its original plan.  With respect to the company's projections for its mid-term financial results (from April 1 to September 30, 2003), taking into account the extraordinary charge and other effects on earnings resulting from the earthquake, the company is revising its net income projection for the first half only from a net loss of 40 billion yen to a net loss of 50 billion yen.  The company's projections for the full 2003 fiscal year remain unchanged from the levels announced in April, with the expectation that this impact on earnings will be offset by recovery in the second half of the fiscal year.

Fujitsu Limited Consolidated Earnings Forecast for Fiscal 2003

                                                                                      (Billion Yen)
                  Half Year (Apr.1 - Sep. 30)  Full Year (Apr.1 - Mar. 31)
                        FY2002                FY2003            FY2002              FY2003
Net Sales        2,150.3              2,150.0          4,617.5            4,800.0
Operating
Income
(Loss)                (23.2)                (20.0)            100.4                150.0
Net Income
(Loss)              (147.4)                (50.0)          (122.0)                30.0

Note:

* All yen figures have been converted to US dollars for convenience only at a uniform rate of $1=120 yen.

* FY2003 from April 1, 2003 - March 31, 2004; FY2002 from April 1, 2002 - March 31, 2003

*  Due to uncertainties relating to changes in demand for products and components in key markets (Japan, U.S., Europe, etc.), currency exchange rate fluctuations, Japan and U.S. stock market conditions, and other factors, actual results may vary substantially from projections above.

Fujitsu Reports FY2003 First-Quarter Financial Results

1. Summary of Consolidated Results (Three months ended June 30)

a. Summary of Consolidated Statements of Operations

                                 Yen                                            U.S. Dollars
                            (millions)                                        (millions)
                      (except per share data)                    (except per share  
                                                                                         data)
                        2003                  2002        Change (%)          2003

Net sales      Y 938,738          Y 982,994        -4.5              $7,823

Operating         (37,886)            (29,070)          -                 (316)
loss

Loss before
income
taxes
and
minority          
interests         (32,853)            (77,107)          -                 (274)

Net loss          (39,808)            (56,428)          -                 (332)

Net loss
per common          
share,
basic              Y (19.90)          Y (28.19)          -          $ (0.166)

b. Summary of Consolidated Financial Condition

                                         Yen                              U.S. Dollars
                                    (millions)                         (millions)
                              June 30          March 31                June 30
                                 2003                2003                        2003

Total                
assets              Y 4,056,251        Y 4,225,361                 $33,802

Shareholders'        
equity                    679,471              702,390                    5,662

Shareholders'              
equity
ratio                          16.8 %                16.6 %

c. Summary of Consolidated Statements of Cash Flows

                                      Three months ended June 30

                                            Yen                            U.S. Dollars
                                        (millions)                        (millions)
                                 2003                2002                      2003
Cash flows from                                
operating
activities            Y (85,902)    Y (94,364)                $ (716)
Cash flows from                                        
investing
activities                  5,566         (53,338)                      47
Cash flows from                                      
financing
activities                 69,719         192,163                      581
Cash and cash
equivalents
at end of                                              
period                      272,623         339,267                  2,272

2. Projections for FY2003 (April 1, 2003 - March 31, 2004)

Consolidated Earnings
Forecast                                Yen
                                        (billions)                        Change (%)
                            FY2003            FY2002
                         (Forecast)        (Actual)                FY02 to FY03

Net sales          Y 4,800.0         Y 4,617.5                    +4.0

Operating                        
income                      150.0                100.4                    +49.4

Net income                          
(loss)                        30.0              (122.0)                         -

Note:All yen figures have been converted to U.S. dollars for convenience only at a uniform rate of $1=120 yen.

Consolidated Business Segment Information (Three months ended June 30)

a. Net Sales

                                                    Yen                              U.S. Dollars
                                                (millions)                          (millions)
                                            2003            2002    Change (%)      2003

Software    Unaffiliated    Y 383,346    Y 380,987        +0.6      $3,195
& Services customers
                 Intersegment         11,925         11,917        +0.1          $99
                 Total                Y 395,271    Y 392,904        +0.6      $3,294

Platforms  Unaffiliated        312,249        379,091      -17.6        2,602
                 customers
                 Intersegment         41,711         42,549        -2.0          348
                 Total                  353,960        421,640      -16.1        2,950

Electronic Unaffiliated        162,646        141,990      +14.5        1,355
Devices      customers
                 Intersegment         16,728         19,456      -14.0          140
                 Total                  179,374        161,446      +11.1        1,495

Financing  Unaffiliated         20,795         24,768      -16.0          173
                 customers
                 Intersegment          1,312          3,161      -58.5            11
                 Total                    22,107         27,929      -20.8          184

Other         Unaffiliated         59,702         56,158        +6.3          498
Operations customers
                 Intersegment         31,136         31,378        -0.8          259
                 Total                    90,838         87,536        +3.8          757

Elimination                         (102,812)    (108,461)          -         (857)

Total                                 Y 938,738    Y 982,994        -4.5      $7,823

b. Operating Income (Loss)

                                         Yen                                        U.S. Dollars
                                      (millions)                Change        (millions)
                                 2003                2002  (Million Yen)        2003

Software &              
Services                Y (3,635)          Y 866          -4,501         $ (30)
(Operating            
Margin)                    ((0.9%))          (0.2%)        (-1.1%)

Platforms                 (19,429)         (12,976)        -6,453         (162)
                                ((5.5%))         ((3.1%))        (-2.4%)

Electronic                  
Devices                      (6,190)          (7,434)        +1,244          (52)
                                ((3.5%))         ((4.6%))        (+1.1%)

Financing                        974              1,548            -574              8
                                  (4.4%)            (5.5%)         (-1.1%)

Other                          
Operations                  2,020                 (71)         +2,091            17
                                  (2.2%)          ((0.1%))        (+2.3%)

Elimination              (11,626)          (11,003)          -623          (97)

Total                    Y (37,886)        Y (29,070)        -8,816        $(316)
                                ((4.0%))          ((3.0%))        (-1.0%)

Consolidated Business Segment Information (Three months ended June 30)

c. Sales to Unaffiliated Customers

                                                      Yen                          U.S. Dollars
                                                 (billions)                      (millions)
                                            2003          2002  Change (%)      2003

Software        Japan            Y 266.0      Y 255.2        +4.2        $2,217
& Services    Overseas          117.2         125.7        -6.7            978
                    Total            Y 383.3      Y 380.9        +0.6        $3,195

Platforms      Japan                216.1         265.0      -18.5         1,801
                    Overseas            96.1         114.0      -15.7            801
                    Total                312.2         379.0      -17.6         2,602

Electronic    Japan                 75.6          68.4      +10.4            630
Devices         Overseas            87.0          73.5      +18.4            725
                    Total                162.6         141.9      +14.5         1,355

Financing      Japan                 20.7          24.7      -16.0            173
                    Overseas                 -                -            -                -
                    Total                 20.7          24.7      -16.0            173

Other            Japan                 49.0          44.4      +10.4            410
Operations    Overseas            10.6          11.7        -9.3              88
                    Total                 59.7          56.1        +6.3            498

Total            Japan            Y 627.6      Y 658.0        -4.6        $5,231
                    Overseas          311.0         324.9        -4.3         2,592
                    Total            Y 938.7      Y 982.9        -4.5        $7,823

d. Sales to Unaffiliated Customers by Products and Services

                                                        Yen                          U.S. Dollars
                                                    (billions)                    (millions)
                                                    2003         2002  Change         2003      
                                                                                 (%)                        

Software    Solutions/SI            Y 154.8    Y 145.9      +6.1      $1,290
& Services Infrastructure            228.5        235.0      -2.8        1,905
                 Total                        Y 383.3    Y 380.9      +0.6      $3,195

Platforms  Servers                      Y 65.1      Y 93.5    -30.4         $542
                 Mobile
                 Infrastructure/
                 IP Network                    37.4         43.6    -14.2          312
                 Transmission                 36.4         47.6    -23.5          303
                 Equipment
                 PCs & Mobile                140.0        150.5      -7.0        1,167
                 Telephones
                 HDDs                              33.3         43.7    -23.8          278
                 Total                        Y 312.2    Y 379.0    -17.6      $2,602

Electronic Semiconductors          Y 90.3      Y 79.0    +14.3         $752
Devices      Others                          72.3         62.9    +14.9          603
                 Total                        Y 162.6    Y 141.9    +14.5      $1,355

Consolidated Statements of Operations (Unaudited)

Three months ended June 30

                                                Yen                                U.S. Dollars
                                          (millions)                            (millions)
                                      2003                2002  Change (%)      2003

Net sales                    Y 938,738      Y 982,994    -4.5         $7,823

Operating
costs and
expenses:
Cost of goods        
sold                                689,561         719,817    -4.2          5,747

Selling,
general and
administrative      
expenses                         287,063         292,247    -1.8          2,392
                                      976,624      1,012,064                      8,139

Operating              
loss                                (37,886)        (29,070)        -          (316)

Other income
(expenses):
Net interest                    (3,119)         (4,862)                      (26)

Equity in
earnings of
affiliated                
companies,
net                                    1,860          (3,522)                        15

Amortization
of
unrecognized
obligation
for retirement      
benefits                         (14,446)         (11,014)                  (120)

Casualty                
loss                                 (4,700)                  -                      (39)

Restructuring                
charges                                    -          (25,899)                        -

Gain on sales        
of marketable
securities                        26,974                    -                      225

Other, net                        (1,536)          (2,740)                    (13)

                                         5,033          (48,037)         -          42

Loss before
income taxes
and minority        
interests                        (32,853)         (77,107)         -        (274)

Income taxes                      7,161          (16,619)         -          60

Minority                                206              4,060          -            2
interests

Net loss                      Y (39,808)      Y (56,428)         -    $ (332)

Note:

All yen figures throughout these statements have been converted to U.S. dollars for convenience only at a uniform rate of $1=120 yen.

Net interest consists of interest income, dividend income and interest charges. Casualty loss refers to repair expenses incurred to cover damages to property as a result of the earthquake that occurred off the coast of Miyagi prefecture, Japan, on May 26th, 2003.

Consolidated Balance Sheets (Unaudited)

                                                        Yen                        U.S. Dollars
                                                  (millions)                    (millions)
                                            June 30          March 31          June 30
                                              2003                2003                 2003

Assets Current assets:

Cash and cash equivalents
and short-term investments    Y 275,603        Y 283,985          $2,297

Receivables, trade                    674,230          840,408            5,618

Inventories                                646,594          595,984            5,388

Other current assets                 377,376          351,263            3,145

Total current assets              1,973,803        2,071,640          16,448

Investments and
long-term loans                         941,793          901,587            7,848

Property, plant and equipment
less accumulated depreciation  884,037          990,552            7,367

Intangible assets                      256,618          261,582            2,139

Total assets                        Y 4,056,251    Y 4,225,361         $33,802

Liabilities, minority interests and shareholders' equity

Current liabilities:

Short-term borrowings            Y 609,392        Y 506,091          $5,078
and current portion of          
long-term debt

Payables, trade                         590,802          716,842            4,923

Other current liabilities         489,079          542,291            4,076

Total current liabilities      1,689,273        1,765,224          14,077

Long-term liabilities:

Long-term debt                        1,218,709        1,257,678          10,156

Other long-term liabilities      293,671          285,513            2,447

Total long-term liabilities  1,512,380        1,543,191          12,603

Minority interests                    175,127          214,556            1,460

Shareholders' equity:

Common stock                              324,624          324,624            2,705

Capital surplus                         519,720          519,720            4,331

Retained earnings (Deficit)    (100,966)         (60,718)            (841)

Unrealized gains on securities
and revaluation surplus on
land                                            16,335              6,090                136

Foreign currency translation    (79,419)         (86,517)            (662)
adjustments

Treasury stock                                (823)              (809)                (7)

Total shareholders' equity        679,471          702,390            5,662

Total liabilities, minority
interests                                                
and shareholders' equity    Y 4,056,251    Y 4,225,361         $33,802

Ending balance of interest
bearing loans                      Y 1,828,101    Y 1,763,769         $15,234

Supplementary Information

                                                    Yen
                                                (billions)
                                    FY2003                  FY2002
                                (Forecast)                                         Change (%)

Capital expenditure    Y 210.0                 Y 147.6                    +42.3
Depreciation                  210.0                    264.6                    -20.7

Consolidated Statements of Cash Flows (Unaudited)

Three months ended June 30
                                                 Yen                                 U.S. Dollars
                                            (millions)                Change  (millions)
                                      2003                 2002    (Million      2003  
                                                                                Yen)                        

1. Cash flows
from operating
activities:
Income (loss)
before income
taxes
and minority      
interests                  Y (32,853)      Y (77,107)      +44,254      $ (274)

Depreciation            
and
amortization                  72,776            88,122        -15,346          606

Increase                          1,802            (6,376)        +8,178            15
(decrease) in
provisions

Equity in                        (1,860)            3,522         -5,382          (15)
earnings of
affiliates,
net
Disposal of
property,
plant
and                            
equipment                         2,417            16,911        -14,494            20

(Increase)              
decrease in
receivables,
trade                            149,470          191,146        -41,676        1,246

(Increase)              
decrease in
inventories                  (80,902)         (45,354)      -35,548         (674)

Increase                      (112,429)        (137,956)      +25,527         (937)
(decrease) in
payables,
trade
Other, net                    (84,323)        (127,272)      +42,949         (703)

Net cash
provided by
(used in)
operating                
activities                    (85,902)         (94,364)        +8,462         (716)

2. Cash flows
from investing
activities:
Purchase of
property,
plant and
equipment                      (39,109)         (42,561)      +3,452         (326)

(Increase)
decrease in
investments
and
long-term                
loans                              57,477            (1,506)    +58,983          479

Other, net                    (12,802)          (9,271)      -3,531         (106)

Net cash
provided by
(used in)
investing              
activities                        5,566          (53,338)  +58,904            47

1+2 ( Free            
Cash Flow )                  (80,336)        (147,702)  +67,366         (669)

3. Cash flows
from financing
activities:
Increase
(decrease) in
bonds,
notes,
short-term                
borrowings and
long-term
debt                                 79,832         281,129  -201,297            665

Dividends                        
paid                                         -          (5,005)    +5,005                -

Other, net                      (10,113)        (83,961)  +73,848            (84)

Net cash
provided by
(used in)
financing                
activities                        69,719         192,163    -122,444          581

4. Effect of
exchange rate
changes
on cash and                  
cash                      
equivalents                          907        (4,612)         +5,519            7

5. Net
increase
(decrease) in
cash
and cash                  
equivalents                    (9,710)        39,849         -49,559         (81)

6. Cash and
cash
equivalents
at beginning          
of period                    282,333         299,418         -17,085      2,353

7. Cash and
cash
equivalents
at end of            
period                      Y 272,623      Y 339,267         -66,644    $2,272

SUPPLEMENTARY FIGURES

I. Forecast for FY2003

1. Consolidated Business Segment Information

(1) Net sales including Intersegment Sales

                                                  Yen                            Yen
                                              (billions)                    (bill  Change
                                                                                    ions)(Billion)
                                          FY2003 (Forecast) Change FY2002 FY02 to
                                      Previous*    Revised** (Bill (Actual) Revi    
                                                                          ion                 ised
                                                                          Yen)                FY03

Software    Unaffiliated  Y 2,120.0    Y 2,120.0  -  Y 2,025.7  +94.2
                 customers
& Services Intersegment          65.0            65.0  -          72.1    -7.1
                 Total              Y 2,185.0    Y 2,185.0  -  Y 2,097.9  +87.0

Platforms    Unaffiliated    1,610.0        1,610.0  -      1,612.0    -2.0
                  customers
                  Intersegment        220.0          220.0  -         231.2  -11.2
                  Total                1,830.0        1,830.0  -      1,843.2  -13.2

Electronic  Unaffiliated        710.0          710.0  -         618.6  +91.3
Devices        customers
                  Intersegment         60.0            60.0  -          68.8    -8.8
                  Total                  770.0          770.0  -         687.4  +82.5

Financing    Unaffiliated        110.0          110.0  -         119.2    -9.2
                  customers
                  Intersegment         10.0            10.0  -            9.1    +0.8
                  Total                  120.0          120.0  -         128.4    -8.4

Other            Unaffiliated      250.0          250.0  -         241.8    +8.1
Operations    customers
                    Intersegment      135.0          135.0  -         137.0    -2.0
                    Total                 385.0          385.0  -         378.9    +6.0

Elimination                          (490.0)        (490.0) -        (518.4) +28.4

Total                                Y 4,800.0    Y 4,800.0  -  Y 4,617.5 +182.4

  (2) Operating Income (Loss) including Intersegment            
  Transactions                                                                        

                                  Yen                              Yen
                                                                                    Change  
                              (billions)                 (billions)  (Billion)
                        FY2003 (Forecast)  Change    FY2002    FY02 to
                    Previous*  Revised**(Billion  (Actual) Revised
                                                      Yen)                        FY03    

  Software &      Y190.0    Y 190.0         -      Y 176.5        +13.4
  Services                                                                        
  (Operating      (8.7%)      (8.7%)    (-%)        (8.4%)    (+0.3%)
  margin)                                                                                

  Platforms          15.0      15.0            -            0.9        +14.0
                         (0.8%)      (0.8%)    (-%)        (0.1%)    (+0.7%)

  Electronic         15.0      15.0            -        (31.6)        +46.6
  Devices          (1.9%)      (1.9%)    (-%)    ((4.6%))    (+6.5%)

  Financing            5.0        5.0            -            4.3         +0.6
                         (4.2%)      (4.2%)    (-%)        (3.4%)    (+0.8%)

  Other                 15.0      15.0            -          10.0         +4.9
  Operations      (3.9%)      (3.9%)    (-%)        (2.6%)    (+1.3%)

  Elimination    (90.0)    (90.0)          -        (59.7)        -30.2

  Total              Y150.0    Y 150.0         -      Y 100.4        +49.5

                         (3.1%)      (3.1%)    (-%)        (2.2%)    (+0.9%)

  Note: *Previous forecast : as of April 25, 2003 **Revised
  forecast : as of July 29, 2003                                            

            (3) Sales to Unaffiliated Customers                

                                                Yen                        Yen                
                                            (billions)          (billions)  Change
                                                                                          (%)  
                                                FY2003                              
                                        (Forecast)      Change    FY2002  FY02 to  
                                    Prev      Revi    (Billion (Actual) Revised
                                    ious*    sed**        Yen)                 FY03

  Software  Japan      Y1,610.0 Y1,610.0      -  Y1,506.8    +6.8        
  &              Overseas      510.0  510.0         -        518.9    -1.7
  Services      
                  Total      Y2,120.0  Y2,120.0    -    Y2,025.7  +4.7        

  Platforms Japan        1,090.0    1,090.0    -    1,159.9    -6.0
                  Overseas      520.0        520.0    -        452.1  +15.0
                  Total        1,610.0    1,610.0    -    1,612.0    -0.1

  Electronic Japan        380.0        380.0      -         299.6  +26.8
  Devices      Overseas  330.0        330.0      -         319.0    +3.4
                    Total        710.0        710.0      -         618.6  +14.8

  Financing  Japan        110.0        110.0      -         119.2  -7.8
                    Overseas        -                -      -            -        -
                    Total        110.0        110.0      -         119.2  -7.8

  Other         Japan        210.0        210.0      -         195.0  +7.7
  Operations Overseas    40.0         40.0      -          46.8 -14.6
                    Total        250.0        250.0      -         241.8  +3.4

  Total         Japan    Y3,400.0  Y3,400.0    -    Y3,280.6  +3.6    
                    Overseas 1,400.0  1,400.0      -      1,336.9  +4.7

                      Total    Y4,800.0  4,800.0            4,617.5  +4.0        

  (4) Sales to Unaffiliated Customers by Products and          
  Services                                                                                

                                                Yen                                  Yen                
                                            (billions)                  (billions)    Change
                                                                                                      (%)  
                                                FY2003                              
                                          (Forecast)            Change    FY2002    FY02
                                                                                                      to  
                                            Prev        Revi      (Billion (Actual)Revised
                                            ious*      sed**      Yen)                        FY03

  Software    Solutions
                    /SI                 Y1,015.0  Y1,015.0      -        Y940.5      +7.9
  &                Infrastruc        1,105.0    1,105.0      -      1,085.2      +1.8
  Services    ture Services                        
                    Total                        
                                          Y2,120.0  Y2,120.0      -    Y2,025.7      +4.7

  Platforms  Servers            Y 385.0      385.0        -        382.8        +0.6
                    Mobile                                                                
                    Infrastruc
                    ture/                                                                        
                    IP network          195.0      195.0        -        189.7        +2.8
                    Transmission        175.0      175.0        -        222.6      -21.4
                    Equipment                                                            
                    PCs & Mobile        675.0      675.0        -        655.5        +3.0
                    Telephones                                                          
                    HDDs                    180.0      180.0        -         161.4    +11,5
                         Total         Y1,610.0  Y1,610.0      -    Y1,612.0      -0.1

  Elect         Semi          
  ronic         conductors      Y  400.0  Y  400.0      -    Y 349.3      +14.5
  Devices      Others                 310.0        310.0      -        269.3      +15.1
                        Total          Y  710.0  Y  710.0      -    Y 618.6      +14.8

  Note: *Previous forecast : as of April 25, 2003 **Revised
  forecast : as of July 29, 2003                                            

  (1) By Customer's Geographic Location    (Million Units)

                                    FY2003 (Forecast)                                        
                                  Previous* Revised** Change FY2002
                          Japan    2.60        2.65        +0.05    2.47
                         Europe    3.20        3.13        -0.07    2.97
              North America    0.13        0.14        +0.01    0.12
                            Asia    0.13        0.14        +0.01    0.12
                          Total    6.06        6.06              -    5.68

    (2) By Product Category                                      (%)

                                      FY2003 (Forecast)                        
                                 Previous*          Revised**      FY2002
            Desktop                  46                44                 47
          Notebook                  54                56                53

      3. Mobile Phone Shipments  

                                                                      (Million Units)
              FY2003 (Forecast)                                                      
         Previous*          Revised**      Change            FY2002        
                 3.45                  3.55        +0.10                3.34                  

    4. HDD Production  

                                                                      (Million Units)
              FY2003 (Forecast)                                                      
         Previous*          Revised**      Change            FY2002        
              11.90                  11.95        +0.05                8.76

    5. Electronic Devices                        

    (1) Net Sales of Semiconductors        

                                                                                 (Billion
                                                                                    Yen)    
                              FY2003 (Forecast)                                      
                         Previous*      Revised**      Change      FY2002  
                                  440.0         440.0                -         398.3
      (Internal            (40.0)         (40.0)          (-)        (49.0)
              use)                                                                          

  (2) Composition of Net Sales by Product Category                
  (Semiconductors)                                                                  

                                                                                         (%)
                                              FY2003 (Forecast)          
                                              Previous*    Revised**      FY2002
                                 Logic                61                61            57
                    System memory                31                31            36
      Compound semiconductor                 8                 8              7
                         and others                                                      

(3) Composition of Capital Expenditure                          
                                                                        (Billion Yen)
                                  FY2003 (Forecast)
                                 Previous*  Revised**      Change    FY2002
                    Total          65.0          65.0                -        60.9

  (Semiconductors)        (35.0)         (35.0)          (-)    (38.0)
                    (PDP)        (11.0)         (11.0)          (-)      (4.2)
                    (LCD)         (1.0)          (1.0)          (-)      (2.3)

  Note: *Previous forecast as of April 25, 2003 **Revised    
  forecast as of July 29, 2003                                                

6. R&D Expenditure  

                                                                                 (Billion  
                                                                                        Yen)      
                         FY2003 (Forecast)                                          
                        Previous*      Revised**      Change          FY2002    
                              255.0            255.0              -            285.7
    As % of                5.3%              5.3%              -              6.2%
        sales                                                                                

7. Capital Expenditures, Depreciation  

                                      Yen                                 Yen                
                                 (billions)                    (billions)Change
                                                                                        (%)
                          FY2003 (Forecast)                  FY2002    FY02
                                                                                        to    
                         Previous*      Revised**  Chan  (Actual) Revis
                                                                 ge                    ed    
                                                                                        FY03
  Capital
  Expenditures                                                            

  Software &          80.0            80.0          -         38.8 +106.1
  Services                                                                              

  Platforms            50.0            50.0          -         36.7  +36.1

  Electronic          65.0            65.0          -         60.9    +6.7
  Devices                                                                                

  Corporate                                                                              
  and                      15.0            15.0          -         11.1  +34.5
  others***                                                                              

  Total                 210.0          210.0          -        147.6  +42.3

  Japan                 180.0          180.0          -        125.6  +43.2

  Overseas              30.0            30.0          -         21.9  +36.8

  Depreciation      210.0          210.0          -        264.6  -20.7

8. Exchange Rates  

                                Forecast Average Rates for

                                  2nd Quarter of FY2003                          
                          Previous                          Revised      Change
                            $1=120 yen                  $1=120 yen              -
                                      2nd Half of FY2003                            
                          Previous                          Revised      Change
                            $1=120 yen                  $1=120 yen              -

  Note:
  *Previous forecast as of April 25, 2003
  **Revised    
  forecast as of July 29, 2003                                                
  *** Including capital expenditures for the parent's          
  administrative divisions and R&D                                        
  expenditures, which can not be allocated.                          

  9. Consolidated Statements of Cash Flows  

                                                                                 (Billion
                                                                                      Yen)
                                          FY2003 (Forecast)                        
                                         Previous Revised***  Chan  FY2002
                                                 **                         ge                
  (A) Cash flows from            320.0      320.0          -    117.7
  operating activities                                                            
                    (Net                 (30.0)      (30.0)      (-)((122.0))
                    income)                                                            
                    (Depreciati    (280.0)    (280.0)      (-)  (343.2)
                    on *)                                                                  
                    (Others)          (10.0)      (10.0)      (-)((103.4))

  (B) Cash flows from         (290.0)    (220.0)  +70.0    (64.4)
  investing activities                                                          

  (C) Free cash flows              30.0      100.0    +70.0      53.3
  (A)+(B)                                                                                

  (D) Cash flows from          (30.0)    (100.0)  -70.0    (67.2)
  financing activities                                                          

  (E) Total (C)+(D)                  0.0         0.0          -    (13.8)

  Note: *Including                                                                  
  amortization of                                                                    
  goodwill                                                                                

  **Previous forecast as of April 25, 2003 ***Revised          
  forecast as of July 29, 2003                                                

About Fujitsu

Fujitsu is a leading provider of customer-focused IT and communications solutions for the global marketplace. Pace-setting technologies, highly reliable computing and telecommunications platforms, and a worldwide corps of systems and services experts uniquely position Fujitsu to deliver comprehensive solutions that open up infinite possibilities for its customers' success. Headquartered in Tokyo, Fujitsu Limited (TSE:6702) reported consolidated revenues of 4.6 trillion yen (US$38 billion) for the fiscal year ended March 31, 2003. For more information, please see: www.fujitsu.com

For details and supplemental information regarding Fujitsu's FY2002 financial results, please see http://pr.fujitsu.com/en/ir/

All company/product names mentioned may be trademarks or registered trademarks of their respective holders and are used for identification purposes only

                                  This information is provided by RNS
                  The company news service from the London Stock Exchange

end of announcement            euro adhoc 30.07.2003
---------------------------------------------------------------------

Further inquiry note: Contact:

Yuri Momomoto or Scott Ikeda                        FOR IMMEDIATE RELEASE
Fujitsu Limited, Public and
Investor Relations                                        July 29, 2003
Tel (+81-3) 6252-2174 (Tokyo)

Branche: Hardware
ISIN:      JP3818000006
WKN:        0354912
Index:    
Börsen:  Frankfurter Wertpapierbörse / official dealing
              SWX Swiss Exchange / official dealing
              London Stock Exchange / official dealing



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