Active Stocks
Thu Mar 28 2024 15:19:25
  1. Tata Steel share price
  2. 155.75 1.90%
  1. ICICI Bank share price
  2. 1,091.10 0.65%
  1. HDFC Bank share price
  2. 1,446.15 0.38%
  1. ITC share price
  2. 429.05 0.25%
  1. Power Grid Corporation Of India share price
  2. 275.85 1.77%
Business News/ Companies / Lenovo reports surprise loss on rising expenses, tax charges
BackBack

Lenovo reports surprise loss on rising expenses, tax charges

The world's second-largest PC maker reported a $288.8 million net loss in the three months ended December

Lenovo’s shares fell 1.3% on Wednesday, paring this year’s gains to 2.3%. The stock has fallen in each of the past three years. Photo: ReutersPremium
Lenovo’s shares fell 1.3% on Wednesday, paring this year’s gains to 2.3%. The stock has fallen in each of the past three years. Photo: Reuters


Beijing:
Lenovo Group Ltd. posted a surprise quarterly loss on rising operating expenses and a $400 million charge due to US tax reforms.

The world’s second-largest PC maker reported a $288.8 million net loss in the three months ended December. That compares with the projection of a $124.5 million profit, according to the average of analysts’ estimates compiled by Bloomberg. Revenue increased 6% to $12.94 billion, compared with the $12.5 billion projected.

Worldwide PC shipments rose during the December quarter for the first time in six years — albeit less than 1%. But HP Inc. widened its lead over its closest rival, according to research outfit IDC. Lenovo still hasn’t come up with an answer for a smartphone business built on the acquisition of Motorola Mobility from Google four years ago for $2.9 billion. And its data centre business remains undercut by domestic rivals.

Rising memory chip costs will weigh on profitability at Lenovo’s PC cash cow, according to Anand Srinivasan and Wei Mok, analysts with Bloomberg Intelligence. “Its phone business remains weak, with a low share and losses that may widen, even with unit and sales gains," they wrote ahead of the earnings.

The miss came as Lenovo swallowed a one-time charge of roughly $400 million as a result of the Trump administration’s tax overhaul, though it said the reforms may result in a lower tax rate for its US operations in the longer term.

Lenovo’s shares fell 1.3% on Wednesday, paring this year’s gains to 2.3%. The stock has fallen in each of the past three years. Bloomberg

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 01 Feb 2018, 12:00 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie