Lenovo Q4 Profit Increased on Strong PC Sales
Lenovo Group reported a more than three-fold increase in its quarterly profit as a result of strong computer sales.
Lenovo’s net profit in the quarter ended March rose to $118 million.
“The growth strategy of PC and Smart Device (PCSD) focusing on commercial, high-growth and premium segments has paid off in delivering record revenue for the fiscal year,” CEO and Chairman Yang Yuanqing said in a statement on Thursday.
Revenue rose 10 percent to $11.71 billion.
For the full year ended March, Lenovo swung to a profit of $597 million, from a loss of $189 million a year earlier. Revenue rose to a record $51 billion, which Lenovo attributed mainly to record revenue from its PCSD business - which accounts for 75 percent of its total revenue.
Business Group Overview
Driven by Lenovo’s Smart IoT strategy, Lenovo's Intelligent Devices Group (IDG) saw revenue grow by almost double digits for the full year (up 9.9%) and pre-tax income more than doubled (109%) year-on-year to US$1,843 million for the same period.
The PC and Smart Devices group (PCSD), one of IDG’s two business units, delivered a record full year revenue of US$38.5 billion, with pre-tax income of US$1.98 billion. Lenovo is the #1 PC company in the world (according to IDC) with record market share of 23.4% for the fiscal year and remains the fastest growing among the top five players (+9.5% year-on-year).
The second IDG business unit, the Mobile Business Group (MBG), improved pre-tax income by US$464 million year-on-year and was profitable starting from the second half of the year thanks to a clear focus on selected markets, a competitive product portfolio and expense control.
The Data Center Group (DCG) achieved the fastest year-on-year growth since the acquisition of the x86 server business, growing 37% with record full year revenue of US$6.02 billion. This was led by strong growth of the Hyperscale and Software Defined Infrastructure, which had revenue growth of 240% and 96% year-on-year respectively.
The global PC market as measured in shipment units declined 4.6% in the three months of the year, estimates from industry consultancy Gartner show.