Lenovo disappoints with poor Q2 performance
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Posted in Financial News, 9th November 2006 16:54 GMT
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Lenovo Group has filed disappointing Q2 results, with net profit down 16 per cent to $38m from a year ago when it was at $45.4m. Revenue for the period was flat at $3.7bn, just one percent up on the year before.
The company said it was still absorbing IBM's PC division, and said "unusually aggressive pricing" by its US competition was behind the poor profits.
China still accounts for almost 40 per cent of the company's revenue, and Company president and CEO William Amelio added that Lenovo's brand recognition in the US could be improved.
He said that there was scope to tighten the supply chain too.
Lenovo bought IBM's PC division in April last year and said it would spend $100m restructuring. In the first quarter this year the company wrote down $19m in restructuring charges, but just $2m in the second.
Mary Ma, company CFO, said there was more restructuring in the pipeline. "We'll continue to examine our operations and root out inefficiency," she said. ®
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