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Lenovo posts US$189m loss on one-time write-off
CHINESE technology giant Lenovo on Thursday said it recorded a US$189 million net loss for its full fiscal year due mainly to a one-time charge, while saying it was planning an overhaul to broaden its appeal.
The Beijing-based company also reported a 69 per cent decline in profit in its fourth quarter ending March 31. Quarterly profit was US$33 million, compared to US$107 million in the same quarter last year.
Revenue in the fourth quarter increased 11 per cent year-on-year to US$10.6 billion, the first double-digit increase in 10 quarters, while full-year revenue was up 5 per cent, it said in a statement to the Hong Kong Stock Exchange.
Full-year profit was hit by a US$400 million non-cash write-off charge from deferred income tax assets, the company said.
Lenovo continues to be weighed down by the poor performance of a sub-scale mobile segment despite an improved datacentre business, Johnathan Ritucci, a Bloomberg Intelligence analyst, wrote ahead of the release.
"Its US PC franchise strategy also needs to be confronted quickly, as (rival Hewlett-Packard) continues to gain segment share," he said.
The company's shares rose more than 4 per cent after the results were released, but later gave up most of those gains in the afternoon to sit 1.6 per cent higher.
However, the stock will be kicked out of Hong Kong's benchmark index next month, after plunging around 70 per cent over the past three years.
Lenovo said it will combine its personal computer group, smart devices and mobile business into an "intelligent devices group", transforming itself from a single PC hardware company into multi-business group.
The company merged its mobile and PC businesses under chief operating officer Gianfranco Lanci, a Lenovo veteran who helped to build the company's presence in Europe according to Bloomberg News.
In 2014, the company bought smartphone maker Motorola from Google and IBM's low-end server business as part of a strategy to expand its business beyond PCs. AFP