Fujitsu shares slump 16% on weak first-half earnings

Fujitsu, the Japanese technology giant, saw its shares plummet by 16% on Friday following a report of weaker first-half earnings for fiscal 2026. The company's adjusted operating profit declined 6.1% to 113.9 billion yen ($720 million) in the six months leading up to September, while revenue increased by 3.8% to 1.63 trillion yen.

Despite the revenue growth, specific divisions faced significant challenges. Hardware Solutions profit dropped by a substantial 64% to 4.5 billion yen, as the cost of memory chips surged and eroded margins. Similarly, profit in the Ubiquitous Solutions business fell 38.3% due to a decline in demand for Windows 10-related upgrades.

Fujitsu's core Service Solutions unit provided some cushioning, with revenue up 5.9% and adjusted operating profit up 11.8% to 133.7 billion yen, buoyed by the popularity of its Uvance digital transformation tools. However, the company's management remained optimistic, sticking to its full-year forecast of adjusted operating profit of 425 billion yen and revenue of 3.51 trillion yen.

This forecast suggests that a robust second-half performance will be crucial for the company to meet its earnings targets.