Lenovo Posted Another Record Quarter
Lenovo announced record Group revenue in the third fiscal quarter of US$17.2 billion, up 22% year-on-year. This was the second consecutive record-breaking quarter, driven by strong growth across all core business groups as well as the company’s transformation businesses.
Profits also set new records, with Q3 pre-tax income up 52% to US$591 million, while net income also increased by 53% to US$395 million. Lenovo’s sustained growth has been boosted by the company’s product portfolio adapting quickly to meet the work-, learn- and play-from-home culture of a rapidly changing world, while transformation investments continue to drive new long-term growth opportunities. Basic earnings per share for the third quarter were 3.31 US cents or 25.66 HK cents.
“The delivery of yet another record-breaking quarter is a reflection of our innovative product portfolio and operational excellence, which drove growth across all businesses,” said Yuanqing Yang, Lenovo Chairman and CEO. “Clearly, 2020 was a challenging year that brought remarkable changes to our world, yet Lenovo quickly responded to the changing market driven by new work and lifestyle trends and delivered strong results. Now, as we begin to see the results of our transformation investments, we will further invest in technology and innovation, drive intelligent transformation across industries, and create sustainable growth.”
The challenges of 2020 continue, in varying degrees, into the new year. These include ongoing geopolitical uncertainties, component supply shortages resulting from strong demand, and the global COVID-19 pandemic. The company said that the outlook for 2021 remains positive. They expect that the new global norm of work-, study- and play-from-home will continue to drive long-term and sustainable growth trends in device demand and cloud/infrastructure requirements.
Lenovo’s mobile business recorded double-digit revenue growth and its highest profitability since acquiring the Motorola business. Mobile Business Group revenue jumped 10.1% year-on-year to $1.52 billion, with pre-tax profit increasing from $3 million to $10 million despite higher freight and logistics costs, and industry-wide component shortages. The company continued to expand its smartphone mix towards higher-end models and build relationships with mobile operators. Revenue from 5G models accounted for 13% of the group’s total.