Lenovo profits disappear
Blames world economy, US, itself
Lenovo saw its profits take a dive in the last quarter although PC sales were up over seven per cent - less than the market as a whole.
Sales for the three months ended 30 September 2008 were $4.3bn and pre-tax income was $39m, down from $125m for the same three months of 2007.
Lenovo's Chairman, Yang Yuanqing, said: "Due to the impact of the global economic downturn, and a shortfall in the execution of our strategic plan, Lenovo’s performance in the second quarter did not meet our expectations,” .
Notebook sales grew 21 per cent and now make up 60 per cent of total revenues. Desktop sales fell three per cent.
Greater China provided 44 per cent of group sales in the period, up 11 per cent. The Americas brought in $1.1bn, down four per cent. Shipments in Europe, Middle East and Africa grew 18 per cent to $890m. Asia-Pacific, except China, provided $467m, up ten per cent.
Gross profit margin fell from 15 per cent in Q2 of 2007 to 12.6 per cent in Q2 of 2008. Lenovo's press release is here (pdf). ®
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