Lenovo Group Ltd (聯想), the Chinese personal-computer maker that reported a loss last week, doesn’t expect demand in the US and Europe to rebound this year, chief executive officer Yang Yuanqing (楊元慶) said.
“We need to wait until next year before we see growth,” Yang said in a telephone interview yesterday. “In emerging markets, including China, we have a more optimistic outlook.”
Yang replaced Bill Amelio as Lenovo’s chief executive after China’s biggest PC maker posted its first loss in three years as US and European companies cut orders amid the worst economic downturn since the 1930s. Raleigh, North Carolina-based Lenovo would “more forcefully” develop its consumer business and expand into emerging markets to drive growth, Yang said.
“The global recession appears to be making 2009 a throwaway year,” Mark Moskowitz, an analyst at JP Morgan & Chase Co, wrote in a Feb. 5 report. The bank this month revised its forecast for global PC shipments to a 14 percent decline this year, from its previous projection for a 3.7 percent drop.
Revenue in the Americas region, Lenovo’s biggest market outside China, fell 22 percent in the three months to Dec. 31, the company reported last week. Sales in Europe, Middle East and Africa declined 32 percent, it said. Lenovo’s loss of US$96.7 million in the quarter, the first since 2006, was triple the median of four analyst estimates compiled by Bloomberg.
The decline in PC demand in China last quarter was “a one-off,” Yang said yesterday. He was “optimistic” China would outgrow other PC markets.
Sales in China, Taiwan and Hong Kong fell 6.5 percent in the three months to Dec. 31, the PC maker said, citing a downturn in the Chinese economy. The Chinese company moved its headquarters to the US after buying International Business Machines Corp’s PC business in 2005.
The reduction of 2,500 overseas jobs that Lenovo announced last month would “help us return to profitability,” Yang said. The company said it expects savings of about US$300 million in the year ending March next year as a result of the cuts.
Lenovo expects to post more losses this year and will return to profit next year, Reuters reported yesterday, citing chairman Liu Chuanzhi (柳傳志). The company doesn’t plan to pay dividends in the year ending on March 31 and the following fiscal year, Liu said.