Lenovo profit plunges 69%

Lenovo Group posted a 69% decline in profit as the personal computer market continues to stagnate and its smartphone business shows little sign of recovery.

The world’s second-largest PC vendor reported a net income of $33 million in the three months ended March.

Revenue increased 11% to $10.6 billion, surpassing the $9.8 billion projected.

Lenovo has become the world’s worst performing technology stock as its smartphones struggle for relevance and its core PC business loses ground to rivals such as HP Inc.

The company has been dropped from Hong Kong’s benchmark index as Chairman Yang Yuanqing counts on a turnaround kicking in by early 2019.

Lenovo continues to be weighted down by the poor performance of a subscale mobile segment despite an improved datacenter business, Johnathan Ritucci, an analyst with Bloomberg Intelligence, wrote ahead of the release.

“Its US PC franchise strategy also needs to be confronted quickly, as HP continues to gain segment share.”

Yang keeps pushing back the deadline to turn around the smartphone business, a mix of Lenovo and Motorola branded products.

This month, the company merged its mobile and PC businesses under Chief Operating Officer Gianfranco Lanci, a Lenovo veteran who helped to build company’s presence in Europe.

Shares of Lenovo were little changed Thursday morning. The stock is set to leave the Hang Seng Index next month after plunging 56% since it was added to the gauge in 2013.

Read: Lenovo drives China tech slump as fallout from ZTE ban spreads

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Lenovo profit plunges 69%