The global recession has taken a toll on yet another computer company.
Lenovo reported on Thursday a net loss and sales decline for both the fourth quarter and fiscal year ended March 31. The Hong-Kong-based PC maker watched its annual revenue shrink to $14.9 billion, a drop of 8.9 percent from the previous year. Including restructuring costs and one-time expenses, the annual net loss totaled $188 million.
For the fourth quarter, sales slumped 25.8 percent to $2.8 billion, combined with a pre-tax loss of $268 million.
Results were certainly hurt by the restructuring costs, which contributed $146 million to the annual loss, and the one-time charges, which added $71 million to the fourth-quarter decline.
But Lenovo placed most of the blame on its meager fourth-quarter global PC shipments, which dropped 8.2 percent from the previous year. To combat the downturn, the company had already announced a cost-cutting and restructuring program, which it hopes will save around $300 million for the 2009-10 fiscal year.
"The past two quarters have been a particularly challenging time in our industry worldwide, and we took some significant steps to get our business back on the right path," said Lenovo Chairman Liu Chuanzhi. "We remain committed to growing our business profitably worldwide, and while our performance in the fourth fiscal quarter did not meet our expectations, we are confident that we have the right pieces in place to hit our financial targets and be ready to take advantage as economic conditions improve."
Despite the weakness in the PC market, sales of Lenovo notebooks accounted for close to 60 percent of fourth-quarter revenue. Lenovo said it's already jumped on the trend toward smaller, lower-cost laptops. Last year, the company unveiled its line of IdeaPad netbooks, which it says have been well received by consumers and the media.
Overall though, this hasn't been a good fiscal year for Lenovo. In the midst of a severe third-quarter loss, President and CEO William Amelio resigned this past February. Earlier this year, Lenovo broke the news that it would lay off around 2500 workers as part of its restructuring plan.
Lenovo joins other PC makers shaken by the recession. On Tuesday, Hewlett-Packard reported lower sales and earnings for the second quarter. In February, Dell announced that its sales fell almost 50 percent for the fourth quarter of 2008.