The smartphone market, with its high production costs and competition, is a tough market. Lenovo has released its financial results for the second quarter, which turned out to be quite unpleasant for us.
In the second quarter, Lenovo gained a net loss of $ 714 million and is the first of their defeat in the last six years. The main reason for the disappointing results – a serious restructuring of the companies after the high-priced acquisitions in the server and the mobile markets in the past year. Most notable was the acquisition of Motorola’s cost of $ 2.91 billion. After the fall of profits, the company incurred non-recurring restructuring costs, including staff layoffs and focus on Motorola, for $ 923 million.
Lenovo said that without these costs the company would have earned a profit of $ 166 million. However, it is still 50% lower than a year earlier. The company expects to complete the restructuring before the end of the financial year and believes that the change will save about $ 650 million during the second half of 2015 and approximately $ 1.3 billion annually.