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China's Lenovo posts Q1 loss on higher costs, sluggish PC market
[HONG KONG] Chinese personal computer maker Lenovo Group posted a first-quarter loss on Friday citing higher costs and slower growth in the personal computer market, and said the outlook was challenging due in part to supply constraints.
The US$72 million loss the company reported for the three months ended June was its first quarterly loss since September 2015, and compared with a profit of US$173 million for the same period last year.
It lagged forecasts for a profit of US$5.29 million, according to the average of 8 analyst estimates in a Thomson Reuters poll.
Supply constraints of key components as well as cost increases weighed on its bottom line and would continue to do so in the short term, the company said.
Revenue was flat at US$10.01 billion, in line with an estimate of US$10 billion.
PC shipments dropped 6 per cent year-on-year, compared with a three per cent decline for the industry, Lenovo said in a filing to the Hong Kong Stock Exchange.
Lenovo lost its position as the world's largest PC maker to HP in the quarter, according to data from Gartner.