China's Lenovo swings to full-year loss on M&A costs

Lenovo is no longer in the top five among global smartphone sellers. Mr. Yang said on June 9 in Silicon Valley, Lenovo plans to launch a new smartphone based on the Motorola's brand and another with Google's Tango, which adds smartphones features such as motion tracking and depth perception.

The company attributed the revenue drop to foreign exchange rate fluctuations, a slowdown in the global PC market and investment to revive the Motorola smartphone business it acquired in 2014.

The PC group's sales fell 20 percent to $6.2 billion in the face of slack demand, even though the company padded its lead as the No. 1 PC company as its PC sales fell less than the overall market. Lenovo's server market share fell to 7.5% from 7.9% in the fourth calendar quarter, while IBM and Cisco Systems gained, according the most recent figures from Gartner. That figure was Lenovo's first net loss in six years and was down from a profit of $829 million the year prior.

Lenovo's Enterprise Business Group sales were $4.6 billion (+73 percent) driven by hyperscale wins in China in the full year, while quarterly revenue fell 8 percent to $1 billion, primarily as a result of a sales force model that was not fully aligned to maximize opportunities for the company. In Japan, a whopping 37 percent said they think they'll work until they reach the grave, compared to 18 percent in China, 12 percent in the United States and United Kingdom, and just 3 percent in Spain.

"The market is shifting from the operator's market to an open market, and, unfortunately, we haven't built that solid foundation", Mr. Yang said.

"It will take more than cost cutting to fundamentally turn around the smartphone business", Grace Chen, an analyst at Morgan Stanley, said in a report.

Lenovo said its fiscal fourth-quarter net profit rose to $180 million from $100 million a year earlier thanks to lower operating expenses and employee benefit costs.

Compare that to the previous quarter, however, and things aren't so rosy. Revenue fell to $9.13 billion from $11.3 billion a year earlier, as sales fell across all regions.

Chinese technology giant Lenovo said Thursday it posted a net loss a year ago, as its smartphones struggle to keep apace with Apple and Android rivals and as the market for personal computers fizzles.

Source: China's Lenovo swings to full-year loss on M&A costs