Motorola puchase almost sends Lenovo into red

Motorola puchase almost sends Lenovo into red

Lenovo have announced the results for its fourth fiscal quarter and full-year ending 31 March 2014, which show a mixed picture.

From a year-on-year perspective the results look good with a 19% rise in revenue and a record 29% rise in profit, but the quarterly results, while still reasonable reveal that Lenovo’s purchase of Motorola almost sent it into the red.

Lenovo has only $3.9bn in the bank and will be feel the pinch when it comes to paying $2.66bn for the transactions of Motorola and IBM, as well as the capital that will be required to turn them around.

Lenovo is now the global leader in PCs with 17.7% share, the third largest smartphone marker with 6.3% share (including Motorola) and tied with Asustek for the third position in tablet computers.

These leadership positions come at a cost as the company remains barely profitable with operating margins of just 2.5% in Q4A. This amounted to $231m, which is very close to the amount the Motorola loses every quarter.

 

Source: Radio Free Mobile

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