Lenovo’s Q1 Profit Rises 64 Percent

The world’s leading personal computer maker, China’s Lenovo Group Ltd, revealed that its first-quarter profit rose 64 percent, whipping approximations as solid PC sales offset warm smartphone demand.

• Revenue was US$10.1 billion, down 6%(down 4% excluding foreign exchange impacts) YoY
• Pre-tax income of US$206million, up 297%YoY
• Net income of US$173 million, up 64%YoY
• Positive developments across every business show transformation strategy’s traction
• Disruptive innovation balanced with operational efficiency accelerates Lenovo’s transformation into a high-growth, “Device + Cloud” company
• Basic EPS of 1.57 US cents, or 12.19HK cents

Lenovo’s Q1 Profit Rises 64 Percent

Beijing-based Lenovo alleged in a filing that net revenue increased to $173 million for the quarter ended June from $105 million in the same period a year before. First-quarter revenue fell 6 percent to $10.05 billion from a year earlier. Compared with an average of $9.63 billion projected by experts.

“The PC market performed slightly better than expected due to stronger performance in mature markets.”

The company’s chairman and chief executive officer Yang Yuanqing marked in the stock exchange statement.

“Competition in the China smartphone market remained very keen while demand remained soft due to the slow economy.”

Lenovo associated its hold on the slackening PC market during the quarter. PC shipments fell 2% year-on-year, compared with a 4 percent drop in the wider industry.

Also Read: Lenovo Announces Fourth Quarter and Full Year 2015/16 Results

Similar to Xiaomi Inc, Lenovo has been aiming on spreading away from extreme competition in low-edge devices in China. It is still the world’s prevalent handset market but affected by the decelerating Chinese economy.

“Lenovo had an urgent need to formulate a sustainable strategy in smartphones, particularly in China.”

Jefferies analyst Ken Hui wrote in a note before the results. Mentioning opposition from local competitors with widespread sales networks in China such as Huawei Technologies Co Ltd.

Lenovo had a 4.5% portion of the international smartphone market in April-June, leaving it an aloof seventh after best player Samsung Electronics Co Ltd’s 24% and Apple Inc’s 15%, according to researcher TrendForce.