China-headquartered device maker Lenovo overturned a loss in fiscal Q1 2017/18 with a profit in the opening period of fiscal 2018/19 as revenue growth accelerated, but its mobile device unit suffered another drop in sales.
In a statement the company said the Mobile Business Group (MBG) improved significantly during the quarter ending 30 June thanks to reducing operating expenses by more than $100 million; refining its product portfolio; and focusing on select markets where it can compete profitably.
The group recorded a pre-tax loss of $97 million in the recent quarter, down from a $173 million loss in the comparable period of 2017. Revenue fell 5.7 per cent year-on-year to $1.64 billion.
Lenovo said mobile device revenue and shipment volume continued to strengthen in Latin America, with both outgrowing the market for seven quarters. In North America, its mobile volume nearly doubled year-on-year as a result of what it said was “the right scaling strategy” to expand to all four major mobile operators.
In the final quarter of its fiscal 2017/18, Lenovo created the Intelligent Devices Group, combining its Personal Computer and Smart Devices Group with its MBG.
Looking ahead, the mobile group plans to continue reducing complexity; streamline the portfolio; drive a more competitive cost structure; and continue to significantly reduce operational loss, the company said. It also will focus on driving profitable growth from core markets including Latin America and North America, and strengthen its presence in mature markets.
The company’s net profit attributable to equity holders hit $77 million compared with a $72 million loss in fiscal Q1 2017: revenue grew 19 per cent year-on-year to $11.9 billion.
The company said it was the second straight double-digit quarterly growth, with profitability improving across all business units.
Yang Yuanqing, Lenovo chairman and CEO, said the company had passed a turning point and entered a phase of “accelerating the execution of our transformation strategy and accelerating the rising momentum in business performance.”
He vowed to return the smartphone business to health.
The Intelligent Devices Group reported a 14 per cent year-on-year increase in revenue to $9.95 billion.Subscribe to our daily newsletter Back