Premium PCs boost Lenovo
Chinese PC maker Lenovo Group reported a 21% rise in second-quarter net profit, beating expectations.
Chinese PC maker Lenovo Group reported a 21% rise in second-quarter net profit, beating expectations, thanks to more premium computers it sold during the period.
Net profit for the quarter to end-September came in at $168m, against $139m a year earlier and an average estimate of $118m from nine analysts, according to Refinitiv data.
Revenue rose 14% to $13.38bn, the highest quarterly revenue in almost four years, helped by an improvement in product mix towards 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,” chair and CEO Yang Yuanqing said in a filing to the Hong Kong Stock Exchange.
“Lenovo will leverage industry consolidation opportunities, and drive growth in highgrowth segments such as gaming PCs, Thin & Light, Visuals, and workstations.”
Lenovo, which lost the world’s largest PC maker crown to HP in 2017, said it had returned to the top spot with 23.7% market share, according to industry tracker IDC.
Global PC shipments edged up 0.1% in the third quarter 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 PC and smart devices group rose 42% year on year to $940m in its financial first half of April to end-September on a 5% pretax profit margin.
The strong core performance comes while 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 $146m from $337m a year earlier.
Loss at the group’s data centre business group narrowed to $123m, and revenue rose 63% to $3.2bn. Lenovo shares were up 4.8% at HK$5.85 by 5.44am GMT.