Chinese technology giant Lenovo said yesterday it saw a loss for the second quarter following a restructuring plan, despite stronger sales in its mobile business.
However, the loss reported by the world’s biggest personal computer maker was narrower than analysts’ forecasts.
“With strong execution, Lenovo acted swiftly and decisively to address challenges, while still delivering better-than-previous-quarter results,” Lenovo chairman Yang Yuanqing said in statement yesterday.
Lenovo had said that it would seek to slash costs by $1.35bn annually and cut 3,200 staff from its non-manufacturing workforce—around 5% of its worldwide headcount, when it announced its first quarter results in August.
“Going forward these actions are intended to drive meaningful run-rate cost savings of about $650mn in the second half of this year and about $1.35bn on an annual basis,” the firm said.
Its shares on the Hong Kong stock exchange closed 5.8% up at HK$7.7 ($0.99) after the quarterly results were announced, while the benchmark Hang Seng Index finished the day 2.4% higher.
Lenovo posted a net loss of $714mn for the second quarter ending September 30, compared to a profit of $262mn in the same period last year.
Analysts had expected the firm to report a $803mn loss, according to Bloomberg News.
Revenue increased 16% to $12.15bn, while the company also saw a pre-tax loss of $842mn.
Lenovo has suffered from a decline in global demand for PCs, which account for around a third of its revenue despite its efforts to diversify into other sectors, including the smartphone market.
Sales in its PC business were down 17% year-on-year at $8.1bn, after shipping 15mn PCs during the second quarter.
Its quarterly mobile business sales, which includes Motorola, was up 104% year-on-year at $2.7bn.