Lenovo announced it passed a key strategic milestone in the turnaround of its mobile unit, as its Motorola business reached operating break-even globally.
On a pre-tax basis, Lenovo’s Mobile Business Group produced a loss of $49 million in its fiscal Q2 (calendar Q3) down from a $164 million loss in the comparable 2017 period. Recent revenue of $1.6 billion was down from $2.1 billion. It said it had taken $175 million out of its operating expenses year-on-year.
Lenovo highlighted North American shipments, which were up 53.4 per cent year-on-year while also showing margin improvement; improved sales in Latin America; and “greatly improved” revenue, volume and profitability in China.
From a product perspective, the company said it had streamlined its portfolio to reduce complexity and focused on scale in mainstream segments, such as with its Moto Z, Moto G and Moto E devices. It also said it is “the first to launch a 5G upgradeable phone in the market”.
Its future strategy indicates it is looking to do more of the same: reduce complexity and streamline its portfolio to create a more competitive cost structure; and focus on profitable growth from core markets including Latin America and North America.
Lenovo said its Intelligent Devices group, which includes PCs and tablets as well as its mobile activities, is “energised by the synergy of shared platforms and resources”. But with the PC business topping $10 billion in revenue for the quarter (a first) it dwarfs the mobile unit.
On a group level (adding in Lenovo’s data centre unit), profit attributable to shareholders for the period of $168 million was up 21 per cent year-on-year, with revenue of $13.4 billion up 14 per cent.Subscribe to our daily newsletter