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Lenovo Back In The Black As Spyware Plagues Brand In US

Lenovo the world’s largest PC Company is back in the black reporting a profit for the quarter of $157 million Vs a net loss of $714 million in the year-earlier period.

The Chinese Company who recently moved to relaunch their Motorola smartphone brand in Australia benefited from a $206 million one-time gain from the sale of an office building in Beijing that it will lease back.

Lenovo also sold and leased back an office building in its fiscal first quarter, for a one-time gain of $129 million.

The downside for Lenovo was that second-quarter revenue fell 7.6% to $11.2 billion from $12.2 billion a year earlier.

“The market is not as good as we expected,” Chief Executive Yang Yuanqing said on an investor call overnight.
Mr. Yang said Lenovo planned to strengthen its sales coverage in the U.S. and Western Europe to try to bolster its server business, while pursuing “hyper scale” customers in China—such as internet companies that buy large numbers of servers to build data centres.

Although Lenovo’s PC market share edged higher in the quarter to 20.9%, its shipments fell because of a continued global market slump, according to market-research firm Gartner.

Recently the Company who are gaining marketshare in the Australian consumer PC market found themselves embroiled in a major security scandal that could have implications in Australia.

The Pentagon has allegedly warned against the use of Lenovo technology following concerns that the Chinese computer manufacturer has been spying on government officials.

An internal report sent out by the J-2 intelligence directorate, the Pentagon warned that Lenovo equipment “could facilitate cyber intelligence-gathering against both classified and unclassified—but still sensitive—U.S. military networks.”

Daniel Stephenson, the attorney who represented Lenovo in court, defended the company by saying that the software had ceased to damage any of its customers’ machines, before adding that as soon as the company became aware, “Lenovo addressed the issue by removing the offending software.”

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