Lenovo has regained its status as the world’s largest PC vendor with 23.4 percent of the global market share, as the Chinese company continues to “intelligently transform” its business in personal computers and smart devices.
“It is now Lenovo’s best time,” Lenovo Chairman and CEO Yang Yuanqing said as he announced a $597 million net profit for the full year ending in March, up from a loss of $189 million in the previous year. The profit beat the market estimate of $592.7 million.
At a time of great global change economically, socially and environmentally, we continue to focus on how we intelligently transform ourselves and enable our many customers around the world successfully to do the same.
Chairman and CEO
The fourth quarter saw a year-on-year profit increase of more than threefold, to $118 million.
“Lenovo’s solid financial performance is the result of the persistent execution of our transformation strategy,” Yang said. “At a time of great global change economically, socially and environmentally, we continue to focus on how we intelligently transform ourselves and enable our many customers around the world successfully to do the same.”
Driven by the strong growth in smart PC products and its data center business, Lenovo reported a 13 percent revenue increase from last year to $51.04 billion, of which the PC and smart device (PCSD) revenue was 75 percent.
Lenovo’s Intelligent Devices Group, which includes two business units — PCSD and Mobil Business Group (MBG) — delivered more than double pretax profit growth from the year before to $1.84 billion, reaping the benefit from operational synergies, including the shared use of a common global supply chain and services, Yang said.
Yang said that the growth strategy of PCSD, focusing on commercial, high-growth and premium segments, has paid off by delivering record revenue for the fiscal year.
After the group’s acquisition of Motorola Mobility, the MBG business started to make a profit for the first time in the second half of the fiscal year with a set of strategic shifts to reduce expenses, simplify its product portfolio, and focus on core markets in Latin and North America.
In the fourth quarter, MBG reported 15 percent year-on-year growth in revenue, which is contributed by the launch of the seventh-generation Moto G and the strong momentum of the Motorola One franchise.
The Data Center Group (DCG) has recorded the fastest year-on-year growth since the acquisition of IBM’s x86 server business in 2014 with full-year revenue of $6.02 billion. The loss from DCG has narrowed from US$425 million year-on-year to $231 million.
Moving forward, the group is targeting secure revenue growth and profitability in its PCSD business and channels investment to build capabilities in smart devices as the group sees great opportunities through the smart internet of things, smart infrastructure and smart verticals.
Lenovo’s share closed down 2.65 percent at HK$5.88 (75 US cents) on Thursday with a low point of HK$5.66.
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