Premium PC business boosts Lenovo's quarterly profit

Premium PC business boosts Lenovo's quarterly profit

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.

Illustration photo of a Lenovo logo
The Lenovo logo is seen in this illustration photo January 22, 2018. REUTERS/Thomas White/Illustration/File Photo

HONG KONG: 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 US$168 million, versus US$139 million a year earlier and an average estimate of US$118 million from 9 analysts, according to Refinitiv data.

Revenue rose 14 percent to US$13.38 billion, 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," 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 US$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 US$146 million from a US$337 million a year earlier. Lenovo said its Motorola brand achieved operational breakeven globally in the second quarter.

Loss at its data centre business group narrowed to US$123 million, while revenue jumped 63 percent to US$3.2 billion.

Lenovo shares were up 4.8 percent at HKUS$5.85 by 0544 GMT.

(Reporting by Sijia Jiang; Editing by Muralikumar Anantharaman and Gopakumar Warrier)

Source: Reuters

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