Premium PC business boosts Lenovo's quarterly profit
INTERNATIONAL - Chinese PC maker Lenovo Group reported a 21 percent rise in second-quarter net profit, beating expectations, thanks to more premium computers it sold during the period.
Net profit for the quarter ended September came in at $168 million, versus $139 million a year earlier and an average estimate of $118 million from 9 analysts, according to Refinitiv data.
Revenue rose 14 percent to $13.38 billion, the highest quarterly revenue in almost four years, helped by an improvement in product mix toward more commercial PCs - a more lucrative category than consumer PCs.
“The Group remains confident in its core PC business, and aims to grow at a premium to the market in revenue without compromising profitability,” Chairman and CEO Yang Yuanqing said in a filing to the Hong Kong Stock Exchange.
“Lenovo will leverage industry consolidation opportunities, and drive growth in high-growth segments such as gaming PCs, Thin & Light, Visuals, and workstations,” Yang said.
Lenovo, which lost the world’s largest PC maker crown to HP Inc in 2017, said it had returned to the top spot with a 23.7 percent market share, according to industry tracker IDC.
Global PC shipments edged up 0.1 percent in the third quarter of the year to 67.2 million units according to data from Gartner, with Lenovo cornering the biggest share due to commercial PC growth and its joint venture with Fujitsu.
Lenovo said pretax profit at its personal computer and smart devices group rose 42 percent year-on-year to $940 million in its fiscal first half of April through September on a 5 percent pretax profit margin.
The strong core performance comes even as Lenovo continues to struggle in its smartphone business amid fierce competition. The company missed a March deadline to turn around the business.
Reported loss before taxation at its mobile unit in the six-month period narrowed to $146 million from a $337 million a year earlier. Lenovo said its Motorola brand achieved operational breakeven globally in the second quarter.
Loss at its data center business group narrowed to $123 million, while revenue jumped 63 percent to $3.2 billion.
Lenovo shares were up 4.8 percent at HK$5.85 by 0544 GMT.Reuters