IBM’s PC Unit Has Been Operating at a Loss

The personal computer business that International Business Machines Corp. is selling to China’s Lenovo Group Ltd. hasn’t made a profit for 3 1/2 years, IBM said in a Securities and Exchange Commission filing.

IBM’s Personal Computing Division had a loss of $139 million in the six months ended June 30 and losses of $258 million in 2003, $171 million in 2002 and $397 million in 2001, the Armonk, N.Y.-based company said. During that period, the PC division had sales of $34.1 billion.

IBM typically doesn’t reveal results for its PC division, which is part of the company’s hardware group that includes more profitable servers. IBM wants to improve its profit margin by selling its PC unit to Lenovo for $1.25 billion, vaulting the Beijing-based company to third from eighth globally among PC makers.

Dell Inc., the world’s leading maker of PCs, has said it’s the only large company that’s consistently profitable in this business. IBM is the third-largest PC maker, behind No. 2 Hewlett-Packard Co.

Shares of IBM rose 12 cents to $98.30 on the New York Stock Exchange.