Lenovo Group Ltd posted a sharp drop in quarterly profit and warned of tough conditions as consumers and businesses cut back on technology spending.

Lenovo's fiscal second quarter net profit dropped to $23.44 million from $105.26 million a year ago, way below an average forecast for $91.80 million.Lenovo derived $1.9 billion of its $4.3 billion in sales from greater China in the quarter, and $1.1 billion from the Americas.

"Companies are collapsing and there's no growth seen in the desktop business," said Kevin Yim, analyst at Dao Heng Securities. "Their operating margin was close to break-even last quarter and there's a big chance Lenovo will make a loss in the third and fourth quarter.

Lennovo stocks were down 20%.

By: DocMemory
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