updated 01:20 pm EDT, Thu August 6, 2009
Lenovo loses in Q1
Chinese computer maker Lenovo has suffered a net loss in its most recent fiscal quarter, the Wall Street Journal reports. The company lost the equivalent of $16.01 million, as compared to a net profit of $110.5 million posted in the same quarter a year ago. Revenue is meanwhile noted to have slipped 18 percent in Q109, from $4.21 billion to $3.46 billion. When ignoring restructuring costs and some one-time expenses, Lenovo claims it turned a small profit.
The company further comments that while PC shipments rose 1.1 percent year-over-year, and marketshare climbed to 8.6 percent, it is still suffering the impact of the global recession. Product prices have dropped, and poor sales are said to be occurring in First World regions, namely North America, western Europe and Japan. "The world economy hasn't yet started a full recovery, so don't set your hopes too high for Lenovo's near-term earnings results," says Lenovo chairman Liu Chuanzhi.
The company is continuing to do well in China, but has had trouble outside the country since buying IBM's PC division. In January the company announced that 11 percent of its workers would lose their jobs, saving the company $300 million per year. Profits are forecast to return in Q209, contributing to a positive fiscal year overall. Behind this is a solid Chinese market, although many PC shoppers are expected to wait until October's release of Windows 7.