Lenovo said its Mobile Business Group “met its commitment to breakeven 4-6 quarters after acquiring Motorola”, noting a successful restructuring and strong performance in emerging markets beyond China.
While trumpeting the operational breakeven for the unit (before non-cash M&A related accounting charges), at a pretax level this unit saw a loss of $30 million for the quarter to 31 December, down from $89 million year-on-year, on sales of $3.2 billion, down 4 per cent (the prior-year period included two months of Motorola results).
Lenovo said that excluding the impact of currency changes, revenue of the mobile business grew 5 per cent year-on-year.
Total smartphone volume declined 18.1 per cent year-on-year, with 20.2 million units sold. The company has seen weakness in its home market, with a 15 per cent year-on-year growth rate outside of the country, driven by emerging markets (India and Indonesia in particular were highlighted).
The proportion of devices sold outside of China has increased to 83 per cent from 59 per cent in the same period last year.
Tablet shipments decreased by 14 per cent to 3.2 million during the quarter.
It also referenced its rebranding, stating that its shift to two brands – Lenovo Vibe and Lenovo Moto – is “driving consistency and efficiency” for the business.
For its PC Group, quarterly sales of $8 billion were down 12 per cent, with pre-tax income of $405 million down 18 per cent. It said that a “greater than expected slowdown in the PC market and foreign exchange fluctuations hurt the PC group’s results”.
And in its Enterprise Business Group, sales of $1.3 billion were up 8 per cent year-on-year. Reported pre-tax loss, which included non-cash, M&A related accounting charges, was $14 million, an annual improvement, Lenovo said.
On a group level, the company reported a net profit attributable to shareholders of $300 million, up 19 per cent, on revenue of $12.9 billion, down 8 per cent.