Chinese computer maker Lenovo Group has felt the sting of the global financial crisis as it today announced pitiful computer sales for its third fiscal quarter ended December 31, 2008.
During the third quarter, Lenovo's worldwide PC shipments declined 5% year-on-year, including a 7% decline in the China PC market. Consolidated sales for the quarter from continuing operations, excluding divested businesses, fell 20% year-on-year to USD3.59 billion. Lenovo's gross profit decreased 48% year-on-year, with gross margin at 9.8%. Lenovo reported a pre-tax loss of USD90 million, excluding a USD6 million restructuring charge, from continuing operations. The loss attributable to shareholders for the third quarter totaled USD97 million.
Lenovo Greater China posted USD1.6 billion in sales in the third fiscal quarter, accounting for 45% of Lenovo‘s total worldwide sales. Due to the continuing economic crisis, Lenovo's total shipments in China were down 1% year-on-year, compared to an industry shipments decline in China of 7%. However, Lenovo reported that its overall market share in China grew 1.8 points to 30.5%.
The company announced today also that it is attempting to put its old guard in place to help rejuvenate the company. Lenovo founder and board member, Liu Chuanzhi, has returned as chairman. Yang Yuanqing, the current chairman of the board, has returned to the role of CEO, a position he held from 2001 to 2004. Yang replaces William Amelio, who has come to the end of his three-year contract. Rory Read, Lenovo's senior vice president, operations, has been named to the newly created position of president and COO. These senior management changes are effective February 5, 2009. Amelio will remain with the company in an advisory capacity until September 2009.
"In the past quarter, same as many other companies, Lenovo was deeply impacted by the global economic turmoil," said Lenovo CEO Yang Yuanqing. "We have taken actions to ensure that in an uncertain economy, our business operates as efficiently and effectively as possible, and continues to grow in the future. The recent restructuring actions we have taken are a direct result of our focus on improving our cost-competitiveness and operational efficiency."
In his new role as president and COO, Read will continue in his existing role leading global operations and is also assuming responsibility for global shared services. Read has been with the company for three years and currently holds the position of senior vice president, operations, as well as acting president of Americas, Japan, Australia/New Zealand and Center of Excellence.