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Lenovo’s loss surprisingly less
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LENOVO Group Ltd posted a surprisingly lower loss of US$714 million in its fiscal second quarter ended on September 30 even though the company had to clear stocks of smartphones and other devices, the world’s largest PC maker said yesterday.
Lenovo’s net loss for the quarter was US$714 million, below the US$803 million average expected by analysts contacted by Bloomberg News. Revenue was US$12.2 billion in the quarter, up 16 percent year on year.
The less-than-expected loss and strong sales growth especially in smartphones and overseas markets lifted the share price of Hong Kong-listed Lenovo yesterday.
Lenovo jumped 5.7 percent, the most in a month, to close at HK$7.70 (99 US cents), compared with a 2.4 percent rise of the Hang Seng Index yesterday.
Lenovo incurred the loss due mainly to clearance of smartphones and server assets that it inherited from its spree of acquisitions, analysts said.
Lenovo spent US$2.9 billion to buy Motorola Mobility from Google and US$2.3 billion for the X86 server business from IBM.
But the acquisitions met Lenovo’s long-term focus to shift from personal computers to the booming mobile Internet and enterprise services in the next decade as Yang Yuanqing, its chairman and CEO, has said repeatedly in previous interviews.
In the new mobile business group, Lenovo generated revenue of US$2.7 billion, up 104 percent year on year. The Motorola business it bought contributed US$1.4 billion to the MBG revenue. Lenovo plans to turn the smartphone business profitable in the next one to two quarters. The company will be more aggressive in boosting its share in the US and Europe next year, Yang said.
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