Fujitsu clocks Q1 loss on weak chips; ups outlook

TOKYO, July 30 (Reuters) - Fujitsu Ltd (6702.T), Japan's biggest IT services company, reported a smaller-than-expected quarterly loss thanks to aggressive cost cuts, and nudged up its its annual outlook for a return to profit.

Fujitsu, which is trying to catch up with bigger rivals IBM (IBM.N) and Hewlett-Packard (HPQ.N), reported an operating loss of 37.2 billion yen in April-June from a profit of 5.8 billion yen profit a year ago.

It raised its operating profit forecast to 90 billion yen in the year to March, above the 66 billion yen consensus estimate of 14 analysts polled by Reuters, and versus its previous forecast of 80 billion yen.

Japan's biggest computer server vendor aims to sell its loss-making hard drive business to Toshiba Corp (6502.T), cut costs in its chip operations and beef up its IT consulting sales overseas to escape from a weak market in Japan.

Its shares rose 44 percent in April-June, outperforming a 25 percent rise on Tokyo's electrical machinery subindex .IELEC.T as it won IT services orders overseas. (Reporting by Mayumi Negishi; Editing by Anshuman Daga)