Lenovo Group Ltd, which lost its leading position in the world's PC market to HP in 2017, posted a surprising loss of U.S.$289 million in the quarter ended in December, the company said today.
Lenovo attributed the loss to a one-time tax charge of about U.S.$400 million related to the U.S. tax reform. But the Trump administration's tax reform may see the company pay a lower tax rate for its U.S. operations "in the longer term", market observers said.
In the quarter ended on December 31, Lenovo's loss came to U.S.$289 million, compared with a profit forecast of between U.S.$124.5 million and U.S.$128 million based on analysts' estimates. A year ago, Lenovo posted a net profit of U.S.$98 million.
The company's revenue totaled U.S.$13 billion in the quarter, up 6 percent from a year ago.
The global market for personal computers grew slightly during the quarter amid sluggish demand. Hewlett-Packard has overtaken Lenovo as the world's No. 1 PC maker, according to International Data Corp, a U.S.-based IT research firm.
Lenovo's surprising loss sends a warning to Chinese firms which generate a huge income from the U.S. market, industry insiders said. The U.S. tax reform and related policies have brought uncertainty and risk for them, they said.
