Lenovo posted a net profit of US$38 million in the second fiscal quarter, lagging a consensus forecast of US$43 million.

One of a handful of Chinese firms trying to forge a global brand by investing abroad, the company has been grappling with expenses arising from its US$1.25 billion purchase of IBM's PC arm in 2005.

Despite strength on its home turf, the firm is struggling to expand beyond Asia and ranks a distant third to Dell and HP with a near 8 percent global market share.

"We believe Lenovo chose to defend by sacrificing profitability. We expect the pricing and gross margin pressure to extend into the third quarter of this fiscal year given the continued weak corporate demand in the United States," JP Morgan said in a research report.

By: DocMemory
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