Lenovo reported a loss for the last quarter, largely due to disappointing sales and the costs of integrating the PC division the Chinese company bought from IBM last year.
The company's fourth-quarter PC shipments either declined or were flat in every market except China, where a strong performance wasn't enough to give an overall profit. In the rest of the Asia-Pacific region, shipments fell 5 percent from the same period last year, European shipments fell 3 percent, and shipments in the Americas were flat, the company said. In China, the company sold 31 percent more.
Overall, Lenovo earned US$3.1 (HK$24.4 billion) for the quarter, 417 percent more than the same period last year, which was too early to include revenue from the IBM's former PC division, which Lenovo formally acquired in May 2005.
That acquisition has proven difficult to digest. In March, Lenovo announced a HK$543 million restructuring plan designed to improve its operational efficiency. The company took a one-time charge for that expense during the fourth quarter, which deepened its loss to HK$903 million.
Lenovo also suffered heavy losses in the Americas, where the company reported an operating loss of HK$252 million on revenue of HK$7.4 billion.
The company's executives remained upbeat, saying the restructuring program will improve its overall competitiveness.
While it's crafting its turnaround story, however, Lenovo needs to keep an eye on its rearview mirror. Taiwanese rival Acer, which has set its sights on knocking Lenovo off its third-place perch in the global PC market, performed far stronger than the Chinese company during the first three months of this year.
Acer reported its net profit nearly doubled to US$160.8 million during the period, while its revenue increased 26 percent from last year, to US$2.55 billion.