China-based Lenovo’s Mobile Business Group posted a pre-tax profit in its fiscal Q3, the first since it acquired Motorola in 2014, despite a double-digit fall in revenue.
In the three months to end-December 2018, the division recorded a pre-tax profit of $3 million compared with a $124 million loss in the same period of 2017. Revenue dropped 19.6 per cent year-on-year to $1.67 billion, which the company said was due to a move to focus on profitable growth in key markets.
Lenovo attributed the turnaround to “masterful execution” on a strategy to reduce expenses, streamline its product portfolio and focus on core markets.
North American volumes outgrew the market by a 40 points and China revenue quadrupled year-on-year, it said.
PC and Smart Device business revenue increased 11.6 per cent to a record-high $10.7 billion.
Along with the mobile division, the PC unit forms part of Lenovo’s broader Intelligent Devices Group (IDG): it recorded a pre-tax profit of $586 million, up from $306 million in the 2017 quarter, on revenue of $12.4 billion, up from $11.7 billion.
IDG revenue accounted for 89 per cent of Lenovo’s total in the recent quarter, up 6 per cent year-on-year.
On a group level, the company recorded a net profit of $233 million, overturning a $289 million loss in the same period of 2017 when it was impacted by a one-off charge related to US tax reform.
Group revenue in the quarter increased 8.5 per cent year-on-year to $14 million, its highest quarterly revenue for four years and the sixth consecutive quarter of year-on-year growth.
Yang Yuanqing, chairman and CEO, said: “When we set out on our journey of intelligent transformation, our goal was to restore and then accelerate Lenovo’s business momentum, while providing our customers and partners with the best technologies in smart IoT, smart infrastructure and smart vertical solutions. We’ve done exactly that and more”.
“What I’m most pleased to see is how Lenovo is bucking the current industry trend – we’re strong, have delivered record-breaking results this quarter and are only getting stronger.”Subscribe to our daily newsletter Back