Lenovo is bringing its technology trade show to the U.S. next month, but the showcase for its latest and best technology is taking a backseat in news play with another management move and a stock downgrade dominating Tuesday’s news.

Another top executive post at Lenovo is changing hands in what has become a game of musical chairs over the past year. And to make matters worse, Morgan Stanley says “sell” Lenovo shares, warning that profits are not going to meet expectations as smartphone sales plunge.

Lenovo’s head of Euope-Middle East-Africa quit the world’s top PC manufacturer, citing “strategic disagreements.” His departure follows several management moves made as part of reorganizations across various business groups (see links about the most recent ones included with this post.)

“Strategic disagreements”

Eric Cador, who held the president of EMEA for just a year, went public in a blunt, succinct LinkedIn post.

“Following strategic disagreements, I will be leaving Lenovo today,” he wrote.

“I want to thank the Lenovo EMEA people who welcomed me very nicely one year ago. I have enjoyed working with them and I’m proud of the job done over the last 12 months. I would like to thank as well all the business partners whom I have worked with.

“The leadership experience has been valuable even if far too short for me to give its full potential. Leadership is the ability to learn, turn the page and look forward to a new journey!”

Interestingly, Cador’s departure came shortly after Lenovo announced it is moving some x86 server manufacturing to Hungary from the huge plant in China which Lenovo bought as part of the IBM x86 business two years ago.

Lenovo said the manufacturing shift is being made to not only cut costs such as shipment but also improve delivery times for new products.

Cador, who plans to return to consulting, will be replaced by Luca Rossi, who will be dual-hatted since he keeps his job as president of Lenovo’s Latin America business. He once led Acer’s European business. Like Cador, Rossi joined Lenovo in 2015.

“Luca has a fantastic track record as a business leader both in and out of Lenovo,” said Lenovo Chief Operating Officer Gianfranco Lanci in a statement. “In the year that he’s led the LATAM business he has transformed our results and share in what are very complex and diverse markets. As we look forward he has a great foundation laid by Eric to build on – a foundation that with Luca’s leadership and experience will ensure we can deliver on our business ambitions as a company.”

Morgan Stanley downgrades stock

The news isn’t any better on the investment front.

Morgan Stanley has cut Lenovo to “sell” from “hold,” warning that profits for the quarter ending in March will fall well below expectations of $220 million to $198 million.

Analyst Grace Chen noted:

“We appreciate Lenovo’s strong execution in streamlining costs in F2Q. However, it will take more than cost cutting to fundamentally turn around smartphone business. Moreover, its cash cow PC profits have declined YoY since F1Q16.”

Lenovo has fallen out of the top five in global smartphone sales with shipments down some 46 percent.

A bright spot has been Lenovo’s growth in global PC market share, with sales in the U.S. leading the way.

Last week, Lenovo also announced a new $500 million investment fund as well as an incubation strategy to drive more growth among its various new and emerging business groups. Lenovo operates one of its two global headquarters in Morrisville.

While those investments may pay off down the road, the short-term picture remains fuzzy.

More reading

You can read Cador’s post at:


​And about the stock downgrade: