Veteran Liu takes over Lenovo as firm posts loss

By Zhu Shenshen | February 5, 2009, Thursday |

Online Edition

LIU Chuanzhi, who is the co-founder of Lenovo and widely respected as one of the pioneers of Chinese IT industry, returned to Lenovo as the chairman today after the world's fourth-biggest PC maker posted a bigger-than-expected loss in the October-to-December period.

Lenovo Group Ltd attributed the loss to the influence of global financial tsunami, which forced its major enterprise clients to cut IT spending.

The challenge of Lenovo is how to switch the core business from elite enterprise PC to the cheap consumer-oriented PCs, analysts said.

In the quarter, Lenovo posted a US$96.7 million loss, the biggest within at least three years, compared with expectations of US$58 million loss estimated by analysts. The company earned US$172 million in the same period a year ago.

The revenue was US$3.59 billion, 20 percent decrease from a year ago.

In the management reshuffle announced today, former CEO Bill Amelio stepped down and was replaced by Yang Yuanqing, the former chairman. Yang, 45, was replaced by 65-year-old Liu, who co-founded the firm in Beijing in 1984.

Analysts expected the company would continue to post loss in the following quarter as the cost of restructure and tough economy environment.

Hong Kong-listed Lenovo's share price dropped 2.67 percent to close at 1.46 Hong Kong dollars (18 US cents) today compared with 1.38 percent jump of the Hang Seng Index.

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Veteran Liu takes over Lenovo as firm posts loss

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