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China's Lenovo posts first quarter loss on higher costs, sluggish PC market

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China's Lenovo posts first quarter loss on higher costs, sluggish PC market

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HONG KONG (Reuters) – Chinese personal computer maker Lenovo Group Ltd <0992.HK> posted a first-quarter loss on Friday citing higher costs and slower growth in the personal computer market, and said the outlook was challenging due in part to supply constraints. The $72 million (55.95 million pounds)loss the company reported for the three months ended June was its first quarterly loss since September 2015, and compared with a profit of $173 million for the same period last year. It lagged forecasts for a profit of $5.29 million, according to the average of 8 analyst estimates in a Thomson Reuters poll. Supply constraints of key components as well as cost increases weighed on its bottom line and would continue to do so in the short term, the company said. Revenue was flat at $10.01 billion, in line with an estimate of $10 billion. PC shipments dropped 6 percent year-on-year, compared with a 3 percent decline for the industry, Lenovo said in a filing to the Hong Kong Stock Exchange. Lenovo lost its position as the world’s largest PC maker to HP Inc <HPQ.N> in the quarter, according to data from Gartner.

(Reporting by Sijia Jiang and Donny Kwok, Editing by Anne Marie Roantree and Stephen Coates)
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