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By Bloomberg

Fujitsu Ltd. plummeted the most on record in Tokyo trading after forecasting a profit drop on costs to shift away from the hardware business and as a weaker euro erodes earnings.

The shares dropped 18 percent, the most since the stock debuted in 1974, to close at 651 yen.

Operating income will probably drop 16 percent in the year started April 1 to 150 billion yen ($1.3 billion), the company said Thursday, when it also reported profit that missed analyst estimates and its own forecast.

Fujitsu relied on computer services for 99 percent of operating income in the year ended March 31, while booking an 89.5 billion yen loss on its audio and navigation equipment business, according to data compiled by Bloomberg. The company is shifting away from hardware, including mobile phones, to software and services.

Fujitsu plans to book 30 billion yen in one-time charges this fiscal year to “reform its business model,” Masaya Yamasaki, an analyst at Nomura Holdings Inc., wrote in a note to clients. Nomura cut its rating on the shares to neutral from buy, citing the revamp costs, eroding margins in the hardware business and the effect of a weakening euro on earnings from the region.