Lenovo 1Q profit falls 90 pct
(AFP)
Updated: 2006-08-03 19:47
BEIJING (AP) - Lenovo Group, the world's No. 3 maker of personal
computers, said Thursday its profit in its fiscal first quarter plunged nearly
90 percent compared with the year-earlier period as it restructured after its
purchase of IBM's PC business.
The company said that after restructuring charges, it earned US$5 million, or
6 cents per share, in the three months ending June 30. That compares with
US$45.9 million in the same quarter last year, when it acquired the IBM PC unit
for US$1.25 billion.
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A customer tries a laptop at a Lenovo computer
store in Beijing, May 2006. China's largest computer maker Lenovo Group
has reported a sharp fall in profit for the first quarter as it struggles
to recover from the loss-making PC business it bought from IBM.
[AFP]
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Lenovo faces intense competition from rivals Dell Inc. and Hewlett Packard
Co. But president William J. Amelio said Lenovo was moving "swiftly and
aggressively" to be a global competitor.
"This will not be easy and it will take time, but I am confident in our
ability to execute our action plan to transform this company," Amelio said in a
statement.
Lenovo said revenues for the latest quarter jumped 38 percent to US$3.5
billion compared with the year-earlier period.
The company said it took a US$19 million charge as part of a restructuring
plan announced in March.
Lenovo said it benefited from strong growth in PC sales in China and India,
holding its lead in the quarter as No. 1 supplier to the Chinese market, with
sales rising 30 percent to US$1.3 billion. The company didn't give details on
sales in India.
PC shipments to the Americas grew 6 percent to US$1 billion, the company
said.
Lenovo chairman Yang Yuanqing said the company is focusing on emerging
markets and other high-growth areas and is trying to expand its business outside
China.
Lenovo signed a deal last month with IBM Global Technology Services for its
software tools to be used on other makers' PCs.
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