Lenovo reported a fourth-quarter profit below analyst estimates. The company is experiencing serious difficulties to revive the brand for smartphones Motorola, while the PC market continues to show decline. The net profit amounted to 180 million USD in the three months to March, said Beijing-based Lenovo in a report on Thursday. For comparison, the average forecast of analysts, was for a profit of 184.9 million USD. The sales reported a decrease of 19%. Lenovo is struggling to revitalize smartphone business Motorola, which he bought for 2.8 billion USD in 2014. The devices are losing market share in China, and growth in the global economy is slowing. The company focuses increasingly on international markets and reduces costs, having dropped out of the top 5 leading companies globally. This complements the challenge of a shrinking industry PCs, reducing more sales of the largest business of the company.
Lenovo’s shares fell 0.4% to 4.98 HKD on the stock exchange in Hong Kong, before earnings to be announced. Shares hit 5-year low earlier this month. Lenovo notes and an annual loss of 128 million USD against a net profit of 829 million USD in the previous year.
“Looking ahead, the markets in which the group will continue to be challenging in the short term”, the company said in a statement.
CEO Jan Yuentsin cuts jobs while trying to make devices the company more competitive. The company said that in the second half of the year shrank cost of 690 million USD and is about to achieve the annual target of 1.35 billion USD.