Lenovo profits dive after IBM purchase

Lenovo reported a net loss of US$116.4 million for the quarter ended March 2006, compared with a $21.4 million profit a year earlier, the last full period before its purchase of IBM's personal computer division. Company officials said restructuring contributed to the loss, but would reduce costs by US$100 million, making the company more competitive in the long-run. Lenovo shares fell 4% in the afternoon after the announcement. Still, the company's business in China is soaring. Shipments rose 31%, higher than the average 23% marketwide growth rate, the Wall Street Journal reported, with revenues almost doubling and operating profits almost tripling.