RPT-PREVIEW-Lenovo Q4 in the black despite market share slip

(Repeats story moved on May 21 with no changes to text)

* What: Lenovo fiscal fourth-quarter earnings.

* When: After 0815 GMT, Wednesday, May 23.

* Back in the black, but competition both at home and abroad will weigh.

By Vinicy Chan

HONG KONG, May 21 (Reuters) - Lenovo Group Ltd. (0992.HK), which slipped a notch to No.4 on the global PC rankings, should slip into the black in the fourth quarter despite grappling with an ailing business abroad inherited from IBM (IBM.N).

China's largest PC vendor, whose underperforming Japanese and U.S. arms are taking the shine off a robust home market, benefited from smaller overhaul expenses this time round.

But it will book some $50-$60 million in costs in the first quarter of 2007/08 for firing 1,400 workers and shifting jobs to cheaper emerging countries, to save some $100 million this year.

This year, it also faces a galvanised Acer Inc. (2353.TW), which replaced Lenovo as the world's third-largest PC maker in the first calendar quarter, plus an impending price war after Dell (DELL.O) introduced a PC for as low as 2,599 yuan (US$340) on Lenovo's home turf in March.

"It's (Lenovo's) U.S. market that's got people worried. We haven't seen a strong up-tick in corporate demand, we're seeing weak retail demand, it doesn't command a strong brand and its product design is just unattractive," said JP Morgan's Charles Guo.

Lenovo, which in 2005 bought out IBM's PC division for $1.25 billion, is forecast to post a fiscal fourth-quarter profit of US$28.8 million, according to predictions by 16 analysts polled by Reuters Estimates.

That compares with a loss of HK$903 million for the quarter ended March 31, 2006.

Shares in Lenovo, one of a handful of Chinese companies trying to craft a global brand, shed nearly a 10th of their value from January to March, lagging the market's .HSI 0.8 percent dip and Acer's 7 percent slide.

But the stock still trades at some 26 times estimated earnings, versus Acer's 12 times and the 17 times of entrenched global leader Hewlett Packard (HPQ.N). according to Reuters data.

HOW THINGS CHANGE

Lenovo had posted its strongest pace of quarterly earnings growth in the fiscal third quarter ended December, as it cemented Asian market share and held costs down.