Lenovo SEHK (HK 992) the Chinese computer manufacturer is not immune from the weakening computer market. For the first time in three years, Lenovo reported its first earnings losses. The company also announced that its American CEO William J. Amelio resigned his position. According to a story by Brain Kraemer of ChannelWeb,
In its third-quarter earnings call Thursday, Lenovo said its worldwide PC sales fell 5 percent year over year due to a continued decrease in the demand for high-end computing solutions. In China, specifically, which is Lenovo’s key market, PC sales dropped 7 percent. Lenovo’s consolidated sales for the third quarter fell 20 percent year over year to $3.59 billion.
Lenovo also reported a pretax loss of $90 million from continuing operations. The loss for shareholders in the third quarter totaled $97 million.
… Lenovo last month initiated a massive worldwide restructuring program that the company hopes will help it save approximately $300 million in the next fiscal year.
As John Paczkowski of the WSJ’s All Things Digital blog indicated Lenovo seems to have got in line behind Apple and Dell. The company has brought back its former CEO and Chairman. The company announced today,
(1) Mr. William J. Amelio resigned as an executive Director, the President and the Chief Executive Officer of the Company; (2) Mr. Yang Yuanqing became the Chief Executive Officer of the Company and ceased to be an Executive Chairman of the Board but will continue to act as an executive Director of the Company; (3) Mr. Rory Read was appointed as the President and the Chief Operating Officer of the Company; and (4) Mr. Liu Chuanzhi was appointed as an Non-executive Chairman of the Board.
Lenovo will need to really focus on its operation to effectively compete in the difficult computer marketplace. The company has a number of very fine products and if managed properly, should be able to weather the current economic storms. Expect the new team to focus even more on the Chinese and Asian marketplace. Stay tuned.