Lenovo Q2 2019: Profits leap 20 percent through strong PC sales

Lenovo has posted positive Q2 2019 financial results as computer sales continue to provide stable revenue. 

On Thursday, the Chinese electronics vendor posted second-quarter earnings (statement) of $13.5 billion in group revenue, growing year-on-year for the ninth quarter in a row.

Pre-tax income grew by 45 percent to $310 million, and net income increased by 20 percent year-on-year to $202 million.

Basic earnings per share reached $1.69. 

Lenovo beat analysts estimates of $199.59 million in net profit, according to Refinitiv data, as reported by Reuters.

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The company says that revenue has remained stable across all trading regions — the Americas, Asia Pacific, China, and EMEA — and each reported over a 20 percent revenue share, despite the existence of "global trade and geopolitical uncertainties."

"Going forward, Lenovo is well-positioned to manage complex and dynamic market conditions, while continuing to deliver sustainable long-term results," the firm added.

Out of Lenovo's Intelligent Devices Group (IDG), made up of both the PC and Smart Devices Group (PCSD) and Mobile Business Group (MBG), the PCSD was responsible for strong revenue. 

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The PCSD reported $10.7 billion in revenue, an increase of 4.1 percent YOY, and sales growth of $7.1 percent year-on-year. Lenovo now accounts for an estimated 24.4 percent of the global PC market. 

The second IDG unit, MBG, was not as successful. The mobile unit posted a revenue decline of 5.7 percent to $1.5 billion.

Lenovo's Data Center Group (DCG) revenue declined by 13.8 percent. The Chinese vendor continues to try and cut costs to the loss-making unit by axing staff and reshaping the business. 

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The tech giant says that with the exception of Hyperscale customers, revenue has increased quarter-on-quarter, however, especially in China where revenue has jumped by over 47 percent. 

Software and services grew by 35 percent year-on-year to close to $900 million. 

"During the quarter we were pleased to see our growth momentum deliver continued solid financial performance amidst a complex and dynamic global trading environment," said Yang Yuanqing, Lenovo CEO. "This success is a testament to our commitment to innovation, to our customers across 180 markets around the world, and to how the world continues to embrace our vision to deliver smarter technology for all." 

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