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Premium PC operations increase Lenovo's quarterly profit



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HONG KONG (Reuters) – Chinese PC manufacturer Lenovo Group (0992.HK) reported a 21 percent increase in earnings for the second quarter, which made expectations, thanks to more premium computers that it sold during the period.

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

Net profit for the quarter ended September amounted to $ 168 million, compared with $ 139 million the year before and an average estimate of $ 118 million from 9 analysts, according to Refinitive Data.

Revenue increased 14 percent to $ 13.38 billion, the highest quarterly revenue of almost four years, using an improvement of the product mix against more commercial computers – a more lucrative category than consumer computers.

"The Group is still confident in its core PC business and aims to grow into a premium on the revenue market without jeopardizing profitability," said President and CEO Yang Yuanqing in an application to Hong Kong Stock Exchange.

"Lenovo will exploit industry consolidation opportunities and drive growth in high-growth segments such as gaming PC, Thin & Light, Visuals and Workstations," said Yang.

Lenovo, who lost the world's largest PC manufacturing crown to HP Inc (HPQ.N) in 2017, said it had returned to the peak with a market share of 23.7 percent, according to industry tracker IDC.

Global PC broadcasts increased by 0.1 percent in the third quarter to 67.2 million units according to Gartner data, with Lenovo interfering with the largest share due to commercial PC growth and joint venture with Fujitsu.

Lenovo said that pretax profit on its computer and smart devices increased 42 percent year on year to $ 940 million in its first half-year in April to September on a 5 percent profit margin.

The strong core performance even comes as Lenovo continues to fight in its smartphone business with tough competition. The company missed a march to reverse the business.

The reported loss before tax at the mobile device during the six-month period decreased to $ 146 million from $ 337 million the year before. Lenovo said that its Motorola brand achieved a working breakeven globally during the second quarter.

The loss in the Datacenter business area decreased to 123 million dollars, while revenues increased 63 percent to 3.2 billion dollars.

Lenovo shares increased by 4.8 percent to 5.45 SEK at 0544 GMT.

Reporting of Sijia Jiang; Editing of Muralikumar Anantharaman and Gopakumar Warrier

Our standards:Thomson Reuters Trust Principles.
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