Record Breaking Quarter for Lenovo
In its third fiscal quarter, Lenovo Group delivered a record performance. Group revenue reached a record high of $14.1 billion, and the tenth consecutive year-on-year quarter of growth. Pre-tax income grew 11% compared to the same quarter in2018, to $390 million and net income also increased 11% year-on-year to $258 million. Basic earnings per share for the third quarter were 2.16 US cents or 16.90 HK cents.
“Last quarter, despite the geopolitical uncertainties and industry-wide supply shortages, we delivered a record-setting performance with geographical balance, operational excellence, and solid strategy execution. Both group revenue and pre-tax income reached all-time highs,” said Yang Yuanqing, Lenovo Chairman and CEO. “These core competencies not only enable us to seize the opportunities of technology transformation and drive sustainable growth, but also help us address the challenges we face today.”
Lenovo’s Intelligent Devices Group (IDG) continues to lead the company’s strong performance. The PC and Smart Devices Group (PCSD), one of the two IDG business units, set all-time records for revenue at US$11.1 billion, pre-tax income of US$684 million, and a PTI margin of 6.2%. IDG’s second business unit, the Mobile Business Group (MBG), posted its fifth consecutive quarter of profitability. In the company’s stronghold of Latin America Lenovo’s volume outgrew the market by 19 points, while improving pre-tax income margin to 5.8%. The Data Center Group (DCG) saw server shipments grow by 18% year-on-year.
Lenovo’s intelligent transformation business strategy continued to show strong momentum as a long-term growth catalyst for the Group. Software and Services revenue surpassed the US$1 billion per quarter for the first time, growing 41% year-on-year, and now contributes 7% of overall Group revenues. In Smart IoT, revenue almost quadrupled year-on-year to US$90 million. Smart Infrastructure revenue grew more than 50% year-on-year driven by Software Defined Infrastructure and Network Function Virtualization. Smart Vertical revenue doubled as a result of triple-digit growth from Data Intelligence Business Group revenue and PCSD solutions in the healthcare and education sectors.