Lenovo posts further losses

 

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By Reuters

Posted on 22 May 2009 at 10:53

Lenovo has posted a second straight quarterly loss, as restructuring costs and the industry slump took their toll.

Lenovo, currently the world's fourth largest PC maker, reported a net loss of $264 million for its fourth quarter to the end of March after posting its first negative earnings, of $96.7 million, in the previous quarter.

Revenue fell to $2.8 billion from $3.6 billion in the previous quarter, with Lenovo taking a $146 million hit as the result of restructuring costs.

The Chinese company says it expects the market to remain tough this year, though one bright spot could be a burst of stimulus spending in its home market of China, where the government has embarked on a campaign to bring more electronics to the countryside.

"The telecoms companies have been developing the 3G market, so there will be rapid growth in this area and we will take advantage of that," says Chairman Liu Chuanzhi. "The government stimulus spending is going to help our company tremendously."

Lenovo lost global market share over 2008 to rivals Dell, HP and Acer, but continued to expand its dominance in China, raising its market share to 30% from 28%.

The company says it hopes to return to profit soon, but gave no timetable, though it announced there were no plans for any further layoffs.