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Wednesday, February 12, 2014

After strong Q3, Lenovo warns acquisitions to hit short-term performance, (NASDAQ: GOOG)

China's Lenovo Group Ltd said third-quarter profit jumped nearly a third, beating estimates, as the world's biggest maker of personal computers hoisted sales of smartphones in its drive to diversify out of the shrinking PC market.Lenovo on Thursday reported net income rose 29 percent to $265.3 million for the October-December quarter. That was before it agreed to spend $5.2 billion on smartphone and servers businesses in two acquisitions in January, a spree that Chief Executive Officer Yang Yuanqing warned will weigh on his company's finances in the near term.Both the businesses Lenovo bought currently lose money. "In the short term (the deals) will have a negative impact on performance," Yang said in a telephone interview after the earnings were announced. Lenovo later specified it will likely take three to five quarters to turn around the Motorola phone business it bought from Google Inc for $2.9 billion.Lenovo has been aggressively pushing into smartphones and servers to offset the global decline in the desktop PC business as consumers switch to mobile devices. As well as the Motorola deal, it agreed to purchase IBM Corp's low-end server unit for $2.3 billion.

Google Inc. (Google) is a global technology company. Shares of GOOG fell by 0.29% or $-3.4901/share to $1186.69. In the past year, the shares have traded as low as $761.26 and as high as $1191.87. On average, 2014080 shares of GOOG exchange hands on a given day and today's volume is recorded at 1725673.