PC maker Lenovo reports $16M loss amid weak demand
Lenovo Group, the world's fourth-largest personal computer maker, reported a $16 million quarterly loss on Thursday amid weak global demand but said its market share grew.business Updated: Aug 06, 2009 10:35 IST
Lenovo Group, the world's fourth-largest personal computer maker, reported a $16 million quarterly loss on Thursday amid weak global demand but said its market share grew. The loss for the three months ending June 30, equal to 18 cents per share, compared with a $110 million profit a year earlier.
Sales fell 17.9 percent from a year earlier to $3.5 billion. "There was little doubt that this year was going to be a challenge to our industry, but we are encouraged that some of the recent actions we have taken are helping our business get off to a hopeful start during the first quarter," said chairman Liu Chuanzhi in a statement.
Lenovo, based in Beijing and in Morrisville, North Carolina, said its global PC shipments rose 1.1 percent by volume over a year earlier, while industrywide shipments fell 3.3 percent. Liu said Lenovo achieved its biggest global market share since its 2005 acquisition of IBM Corp.'s PC unit, though he gave no details.
Lenovo said sales in China were $1.7 billion, unchanged from a year earlier, but shipments rose 15 percent. It said market share grew by 0.3 percentage points to 28.6 percent.
Lenovo has benefited from China's resilience against the global slowdown but faces competition from industry leader Hewlett-Packard Co. and No. 2 Dell Inc. Chinese economic growth accelerated in the last quarter to 7.9 percent from a year earlier, up from 6.1 percent the previous quarter.
The company said sluggish U.S. and European demand contributed to a 17 percent drop in PC shipments to mature markets. It said sales in those markets were $1.3 billion, or 38 percent of its global total.
Shipments to emerging markets fell 6 percent from a year earlier, Lenovo said.
Liu, the company's founder, returned as chairman in a management reshuffle in February in which American CEO William J. Amelio departed after a three-year stint. Amelio was succeeded by Yang Yuanqing, Lenovo's former chairman.
Lenovo says its restructuring, announced earlier, should cut costs by $300 million a year.