Lenovo revenue down, but second quarter brings profit

Revenue for the quarter, which ended on 30 September, was US$11.23 billion compared to US$12.15 billion in the second quarter of the previous financial year.

But there was a welcome return to the black, with the company recording pre-tax profit of US$168 million compared to a loss of US$842 million in the corresponding period last year. Net profit was US$157 million, compared to US$714 million last year.

A company media release quoted chairman and chief executive Yang Yuanqing as saying: “Market conditions remained challenging but we delivered solid results. Our PCSD (PC and Smart Devices Business Group) business maintained leadership and strong profitability, our mobile business had good quarter-to-quarter volume growth and margin improvement, and our data centre business is actively addressing its challenges.

{loadposition sam08}“We have also added several of the industry’s top minds into Lenovo, and are continuing to strengthen our leadership team. We remain confident in our vision, our strategy and our team’s ability to achieve new heights.”

Lenovo produces smartphones under both its own and the Motorola brands. Both these brands come under the mobile business group (MBG). Sales for the second fiscal quarter were US$2 billion, down 12% year-over-year, but 20% up compared to the corresponding quarter last year.

The MBG had a pre-tax loss of US$156 million. Shipments in the second quarter increased by almost 25% to a total of 14 million compared to the second quarter a year ago.

There was an increase in both the Asia Pacific and India, with mobile shipments to India increasing 15% year-over-year. Moto shipments were up almost 40% from the second quarter last year due to the Moto G and successful launches of new Moto Z and Moto Mods.

The company's data centre business was flat quarter-on-quarter with revenue of US$1.08 billion.