Technology group Lenovo announced results for its second fiscal quarter ended September 2018. For the third straight quarter, the company achieved strong double-digit growth in revenue year-over-year.
Group revenue reached US$13.4 billion, up 14% year-over-year (18% YOY excluding currency impact) – reporting its highest quarterly revenue for nearly four years.
The company also reported its second consecutive quarter of strong, pre-tax income of US$213 million, six times as much as the previous year as all businesses reported profit improvements.
Lenovo’s board of directors declared an interim dividend of 6.0 HK cents per share.
The group’s PC and Smart Devices business surpassed the US$10 billion revenue mark, with Lenovo saying that it returned to the global #1 in PCs with a 23.7% market share.
“Today’s results show that Lenovo’s focus on Intelligent Transformation continues to successfully underpin our growth in both revenue and profitability. But our numbers only tell part of our story. I’m proud of how we are delivering on both our transformation strategy and our turnaround promise. There is no doubt that Lenovo is in a period of strong, sustainable growth and I am confident that our clear mission, strategy and execution capabilities will continue to drive even stronger results in coming quarters.” said Yang Yuanqing, Lenovo chairman and CEO.
Business Group Overview
The Intelligent Devices Group delivered a strong revenue growth of 10% year-on-year, amounting to US$11.84 billion.
During the quarter, the PC and Smart Devices (PCSD) business under IDG reported US$10.2 billion in revenue, up 18% YOY, the first time ever that this business has surpassed US$10 billion in revenue, Lenovo said.
The quarter saw continued strong double-digit growth for high-growth segments including Legion gaming, ThinkStation workstations and thin and light Yoga, ThinkPad and IdeaPad categories – bolstering future premium growth in volume, revenue and profit.
The Mobile Business Group (MBG) under IDG also continued its improvement during Q2, executing on its turnaround strategy that sees the business focusing on reducing expense, simplifying the product portfolio and focusing on core profitable markets.
“The quarter saw a major strategic milestone achieved – with operational break-even of Motorola globally- reducing operating expenses by US$175 million compared to Q2 of last year,” Lenovo said.
Lenovo’s Data Center Group (DCG) reported its fifth consecutive quarter of profit growth (PTI% up 9.5% pts YOY) on a 58% YOY increase in revenue to US$1.5 billion.