Lenovo looks for SCM to improve profitability

Filed in archive Market Overview on November 12, 2006

PC maker Lenovo reported flat revenues for its most recent fiscal quarter, saying pricing pressures in the U.S. and continued supply chain issues hurt its performance even though it gained market share and remained profitable, according to a report from CRN.

The Raleigh, N.C.-based company, reporting its earnings from Hong Kong in a presentation that was webcast, suffered from an inability to deliver products quickly enough -- an issue CEO William Amelio said was being corrected.

"While we are making progress, there's a ton of work we need to do," Amelio said. "We have great innovations our customers want to buy and pay for. We get frustrated because we're not able to deliver on the demand because of some of the stubborn supply problems we have in place."

Overall, lenovo reported revenue of $3.7 billion for its quarter, almost flat when compared with the $3.65 billion for the same quarter a year earlier. Lenovo's profit attributable to shareholders was $38 million, compared with $45 million for the year-ago period.

"It was not an easy quarter," said Mary Ma, Lenovo's chief financial officer, during its earnings presentation. "We experienced increased competitive pressure with depressed margins."

Lenovo's worldwide market share grew during the quarter, from 7.7 percent to 7.8 percent. A lot of the company's strength remains in China, where much of its operations are located and where Lenovo maintains its deepest presence and corporate heritage.