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Lenovo, China’s largest personal computer maker which bought IBM’s PC business last month, reported an unexpected drop in turnover in the year to March 31 although earnings rose 6.4 per cent.

The Hong Kong-listed company, the world’s third largest PC maker, said sales dropped 2.6 per cent to HK$22.55bn (US$2.9bn), compared with HK$23.18bn in the same period last year. Net profit rose from HK$1.05bn to HK$1.12bn.

Lenovo bought IBM’s struggling PC business for US$1.75bn to fulfil its international expansion ambitions amid a maturing yet increasingly competitive market at home.

However, the company’s share price has fallen nearly 10 per cent since last December, when the offer was first announced, as investors were concerned whether Lenovo could manage a foreign business that is three times its own size.

The company proposed a final dividend of 2.8 cents, compared with 3 cents last year.

Copyright The Financial Times Limited 2017. All rights reserved.
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