Lenovo blames smartphones for its first loss in six years

Lenovo had a nice run of profits thanks to its PC business, but like many others, it's finding smartphones to be a tougher go. Thanks to charges related to its Motorola acquisition and $300 million worth of unsold phones, the company incurred a hefty $714 million net loss for the first time in six years. PC sales didn't actually help much, with revenue in that division dropping 17 percent over last year (though still less than its rivals). Despite all that, Lenovo said overall sales were actually up over last year to $12.2 billion, and added that the changes it made will save $650 million this year alone.

Unfortunately, most of those savings are due to layoffs, as Lenovo is cutting around 3,200 jobs. The company recently said that it's facing its "toughest market environment in recent years," but is still confident that its $2.9 billion purchase of Motorola will pay off. As proof, it pointed to smartphone sales outside of China that jumped from 19 percent to 70 percent overall. Total mobile sales increased 11 percent over last year to $2.7 billion, and Motorola is now chipping in a little over half of that. As a result, it believes it that its mobile group will stop the bleeding and show a profit in as little as "one to two quarters" -- a story we've heard before.