Lenovo shares drop sharply as it posts first quarterly loss in two years
Hong Kong — Chinese personal computer maker Lenovo warned of higher costs and margin pressure due to shortages of components like memory chips, as it posted its first quarterly loss in almost two years on Friday. Lenovo, which gave up its title as the world’s largest PC maker to HP in the quarter to end-June, lost $72m compared with a profit of $173m for the same period last year. It was the company’s first quarterly loss since September 2015 and lagged analysts’ average forecast of a $5.29m profit, sending the stock down as much as 5% to a year-low of HK$4.52 during Friday morning trade. The outlook for the rest of the year was challenging as component shortages would dive costs higher, possibly forcing the company to raise its selling price to protect margins, executives said. "Most of the component cost is stabilising except memory … and the price is still going up," Lenovo chief operating officer Gianfranco Lanci said on an earnings call. Memory prices rises would continue "at l...
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