New | Lenovo hopes to turn around China smartphone operation

Technology giant Lenovo Group plans to go on “full attack mode” in the Year of the Monkey to turn around its flagging smartphone operation in China and expand its enterprise business worldwide.

That upbeat assessment by chairman and chief executive Yang Yuanqing, however, seemed to provide little comfort to investors.

The world’s largest supplier of personal computers saw its share price fall 10.19 per cent -- the stock’s biggest drop in two years -- to close at HK$6.61 on Wednesday, after reporting mixed results in its fiscal third quarter which ended on December 31.

Lenovo delivered a surprise by posting a 19 per cent increase in net profit to US$300 million in the three months to December, up from US$253 million in the same period in 2014, on the back of a sweeping corporate restructuring that helped cut operating expenses.

So-called realignment actions announced in August, which included laying off 3,200 employees around the world, are projected to bring total savings of US$1.35 billion for Lenovo’s fiscal year to March.

Another surprise from Lenovo was an 8 per cent decrease in its fiscal third quarter revenue to US$12.91 billion, down from US$14.09 billion a year earlier, due to currency fluctuation and the tepid global demand in personal computers.

Consensus estimates by analysts projected Lenovo’s revenue last quarter at around US$13 billion.