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China's Lenovo sinks to biggest quarterly loss as restructuring bites
[HONG KONG] China's Lenovo Group Ltd reversed into its biggest-ever quarterly loss in the July-September period, soaking up acquisition and restructuring costs to cope with tepid demand in the global personal computer and smartphone markets.
The world's biggest maker of personal computers said on Thursday it booked a net loss of US$714 million for its fiscal second quarter, compared with a net profit of US$262 million a year ago. Though hefty, the loss was narrower than the US$787.8 million analyst expected, according to Thomson Reuters SmartEstimates.
Beijing-based Lenovo last year made two multi-billion-dollar acquisitions - for Google Inc's Motorola handset unit and IBM's low-end server business - in a response to the shrinking global market for personal computers.
The company said earlier this year it would book a one-off charge of about US$900 million in smartphone inventory clearing and restructuring costs in the second quarter. It plans to cut about 3,200 non-manufacturing jobs this year.
The company said in a filing to the Hong Kong stock exchange it expects the realignment moves to generate cost saving of US$1.35 billion on an annual basis.