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Lenovo’s Gross Profit Dips to US$1.9 billion

Lenovo's Gross Profit Dips to US$1.9 billion

Lenovo announced results for its third fiscal quarter ended December 31, 2015. Quarterly revenue was US$12.9 billion, an 8 percent year-over-year decrease, or 2 percent year-over-year in constant currency.

Third quarter pre-tax income, excluding non-cash, M&A related accounting charges of US$77 million, was US$397 million, while reported pre-tax income was US$320 million, up 17 percent, exceeding analyst’s estimates. Net income was US$300 million, up 19 percent, also exceeding analyst’s estimates.

“Last quarter, although we were impacted by the global macro-economic slowdown, currency fluctuations in key markets, and PC market decline, Lenovo still achieved record high profit and delivered on our commitment to turn around the Mobile business,” said Yuanqing Yang, Chairman and CEO, Lenovo.

“Next, in PCs, we will leverage the consolidation trend, commercial PC replacement, and opportunities in innovative product categories to drive growth. In Mobile, we will build scale and efficiency to accelerate our growth in emerging markets, breakthrough in mature markets with innovative products and premium brands, and expand in the open market in China with a stronger product portfolio. And finally, in Enterprise, we will leverage leading technologies and strategic partnerships to drive profitable growth,” he added.

The Company’s gross profit for the third fiscal quarter decreased 10 percent year-over-year to US$1.9 billion, while gross margin stood at 14.6 percent. Operating profit for the quarter was US$379 million. Basic earnings per share for the third fiscal quarter was 2.71 US cents, or 21.01 HK cents. Net debt reserves as of December 31, 2015, totaled US$49 million.

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