The world’s largest computer and smartphone devices producer, Lenovo posted their net profit that has plunged by 51 per cent, as compared to the same quarter last year’s income to $US105 million. The company’s quarter earnings have scaled by 3 per cent, and are still unable to fulfill market expectations. The reason behind drop in their earnings is losses in its smartphone business units, and PC shipments, as stated by the company.
The company said that its net profit slumped from $US211 million to $102 million last year, and revenues roused by 3 per cent to $US10.7 billion. With an aim to reduce expenses and prospects, the company asserted that it will cut down around 5 per cent of its global workforce, or around 3,200 jobs.
The company said that Lenovo's PC shipments fell by 7 per cent to $US13.5 million. Interest was harmed as clients sat tight for the entry of Windows 10 from Microsoft. It added further that Lenovo's share of the worldwide PC business sector expanded by 1.3 rate focuses to 20.6 per cent.
PCs are still pivotal to Lenovo, representing $US7.3 billion of its $US10.7 billion of business in the second quarter. Its mobile business income, covering smartphones business sector ascended by 20 per cent to $US2.1 billion the second quarter; however, the Lenovo’s business group had a pretax loss of $US292 million, as stated by Lenovo.
Lenovo in today's report stated that it is confronting difficulties, and said that its center PC business was still functioning well yet in a declining market, the Group must keep on having the capacity to wind up more productive and lessen costs in order to check the business stays sound and profitable.
Lenovo pointing towards its mobile products, including smartphones, it’ll attempt to better align its Motorola brand that has recently been acquired from Google, with Lenovo, with Moto dominating as a leader in product development, manufacturing and design. The company is encountering harsh rivalry at home from Xiaomi at the lower end of the business, and Apple and Samsung internationally.
Lenovo's Hong Kong-traded shares have lost more than a fifth in the previous year. The company has declared significant sectors where it lacks, which cover tablet and global computer sector, along with increase in competition and allowing economy in the smartphone market.
Executive chairman Yuanqing Yang stated that Lenovo would rebuild its smartphone business, along with the challenging market environment in the coming years.