Lenovo Faces “Sizeable Challenges” As Profits Fall
Lenovo’s latest earnings report (for the quarter ending December 31st) has seen the company’s revenue and profits slide despite “strong growth in mature markets”.
Overall, quarterly revenue dipped 6% to US$12.2 billion while net income dropped 67% year-on-year to US$98.
“Despite ongoing macro-economic uncertainties and the two new businesses still in transition, Lenovo delivered a solid performance last quarter,” insisted Yang Yuanqing, Lenovo Chairman and Chief Executive Officer, in a statement.
He says Lenovo’s “PC business remains strong, our Mobile business has made steady progress, and our Data Center business now has a clear improvement plan in place. Although it takes time to build the core competence in these two new growth engines, we are confident to achieve breakeven and profitable growth in them.”
Sales for the company’s PC and Smart Devices Business group grew 2% year-on-year to US$8.6 billion. Lenovo say they saw “strong growth” in tablets, “outperforming the market by 29 points”.
Their report also highlighted the high-growth of categories like gaming PCs (which grew 71%), Chromebooks (which grew 76%) and detachables (which grew 91%)
“These are all product lines that Lenovo is ramping up, typified by our new Legion-branded series of gaming laptops launched last month at CES,” the company said.
Meanwhile, when it comes to mobile, the company managed to bounce back somewhat. It grew quarterly sales 7% on the previous quarter to US$2.2 billion. However, it’s still a 23% drop compared to the previous year’s results.
Lenovo shares fell close to 7% in the aftermath of the of the announcement.