Lenovo reports net loss of £469m after restructuring costs

But Hong Kong devices firm weathers industry decline with 16 per cent revenue rise

Lenovo has reported a net loss of $714m (£469m) for the quarter ending in September, highlighting a restructuring programme, as well as the continuing decline of the PC market, as the reasons for its losses.

However, the news wasn't all bad for Lenovo, as its revenue managed to rise 16 per cent to $12.2bn for the second quarter.

Lenovo commented that it has continued to see a deceleration in smartphone and tablet sales, as well as the ongoing PC and laptop decline, saying the "macro-economy and global markets remain challenging" as well as pointing out "currency fluctuations in emerging markets".

It also blamed a general market shift in the Chinese smartphone market as "traditional carrier channels" moved online, with increasingly intensifying competition in China.

Lenovo's restructuring programme cost 3,200 jobs, and was designed to lead to eventual savings of $1.35bn. However, Lenovo is clearly experiencing bumps in the road before that ambition is realised.

Lenovo's chairman, Yang Yuanqing, called the cull a success, commenting:

"We are very proud of our execution of the restructuring," adding that the company is "on track" to start saving money next year and that it is not planning any more job cuts.

He also said Lenovo is planning, with the state of the Chinese market in mind, to shift its focus more fully to the global market.

"The China PC market is still very solid, this is our profit pool," he said.

"But in the smartphone business we are shifting our focus from China to the rest of the world.

"Given our priorities of turning round the mobile business, we don't want to lose money here; we want to shift our focus to the profitable area, which is rest of emerging markets."

As an example, Yang revealed that sales of devices in the last three months had grown by 160 per cent in Russia, and 70 per cent in India.

Lenovo received a good deal of attention earlier this year for knowingly shipping malware-like software in its devices earlier this year, but it is unclear whether this exposure has affected sales.