Lenovo profits plummet 67% amid struggling mobile and data centresFebruary 17, 2017 - 14:44 AMT PanARMENIAN.Net - The mobile division of China's Lenovo Group Ltd (0992.HK) is "on track" to return to profit by December at the earliest helped by strong growth in overseas markets, its chairman said on Thursday, February 16 after the firm posted a 67 percent drop in quarterly earnings, Reuters reports. Yang Yuanqing also dismissed the possibility of selling the struggling division to focus on the personal computer (PC) market where Lenovo is the world's biggest maker by shipments, as widely proposed by analysts and company watchers. "No, that is not my plan," Yang said in an interview. "Mobile should be our core business as well." The smartphone market has changed markedly since Lenovo spent $2.91 billion buying the money-losing Motorola handset business in 2014. Since then, global shipment growth has slowed, while at home in China, Lenovo's biggest market, late-comers such as Oppo and Huawei Technologies Co Ltd [HWT.UL] have risen to prominence. The mobile division now accounts for about 18 percent of Lenovo's revenue, and in October-December, reported an operating loss of $112 million - roughly the same as in the previous quarter. "I cannot say I am 100 percent satisfied (with the Motorola integration) ... but it is within my expectations," Yang said. But he said he was confident of a recovery in the second half of the fiscal year starting April, as handset shipments rose 7 percent in October-December from three months prior. That rise came even though the mobile division was hardest hit by an industry-wide shortage of components such as memory chips. Moreover, Lenovo appointed former Samsung Electronics Co Ltd (005930.KS) executive Jaden Jiang earlier this month as vice president, in charge of mobile strategy in China. Overall, component supply constraints plus a "challenging" macro-economic environment in the third quarter pushed net profit down 67 percent on year to $98 million, on revenue which fell 6 percent to $12.2 billion, Lenovo said. The profit result compared with $159.53 million average of 14 analyst estimates in a Thomson Reuters poll. Lenovo's PC division, which accounts for about 70 percent of revenue, saw revenue rise 2 percent after seven quarters of decline. Shipments rose 2 percent, helped by a 5 percent rise in shipments of PCs for businesses. That helped its global PC market share hit a record high of 22.4 percent, Lenovo said. Yang said Lenovo would continue to consider mergers and acquisitions to further its lead in the PC market, but declined to comment on talks it has held with Japanese PC maker Fujitsu Ltd (6702.T). Top stories Yerevan will host the 2024 edition of the World Congress On Information Technology (WCIT). Rustam Badasyan said due to the lack of such regulation, the state budget is deprived of VAT revenues. Krisp’s smart noise suppression tech silences ambient sounds and isolates your voice for calls. Gurgen Khachatryan claimed that the "illegalities have been taking place in 2020." Partner news Most popular in the section | Scholz hopes Armenia-Azerbaijan peace treaty will be signed this year German Chancellor Olaf Scholz hopes that a peace treaty between Armenia and Azerbaijan will be signed this year. Armenia, Russia discuss life extension of Metsamor nuclear plant Issues regarding the extension of life of the 2nd power unit of the Armenian Nuclear Power Plant were discussed in Yerevan. Armenians stage more campaigns against territorial concessions to Azerbaijan Protesters blocked more roads across Armenia on Friday, April 26 in continuing attempts to scuttle territorial concessions to Azerbaijan. Czech-Armenian military cooperation discussed in Yerevan A delegation led by the Director General for the Industrial Cooperation Division of the Ministry of Defence of the Czech Republic visited Armenia. |