Lenovo records $665 million net profit from strong PC demand
Lenovo has posted $665 million in net profit for the fiscal year ended March 31, marking a 12% improvement compared to the year prior.
Revenue-wise, the company remained steady at just shy of $51 billion. Almost four-fifths of this came from its PC business.
It also paid $213 million in taxes, which was $14 million more than the year prior.
The jump in net profit was largely attributed to Lenovo's Intelligent Devices Group (IDG) recording a pre-tax income of a little over $2 billion, up 25% year on year.
The PC and Smart Devices group, one of the two business units within the IDG group, provided the bulk of IDG's profit by way of almost $40 billion in revenue and a pre-tax profit of $2.3 billion, which were 3.6% and 18% year-on-year upticks, respectively.
According to Lenovo, its PC and smart devices arm held a 24.5% global market share for the fiscal year ended March 31.
IDG's second business unit, Mobile Business Group (MBG), did not fare as well, reporting a pre-tax loss $43 million due to a 19.2% year-on-year decline in revenue to $5.2 billion. Lenovo said its mobile business unit was impacted from the forced closure of its primary smartphone factory in Wuhan, China because of the COVID-19 pandemic.
During the fourth quarter, when the COVID-19 outbreak commenced, Lenovo's MBG revenue dropped by almost 40% quarter on quarter, from almost $1.4 billion to $824 million.
Meanwhile, Lenovo's data centre business also experienced an 8.7% decline in revenue to $5.5 billion, which resulted in a pre-tax loss of $225 million. The data centre business had a pre-tax loss of $230 million in the year prior.
The company attributed the decline to hyperscale demand suffering as a result of the sector's cyclical slowdown.
Addressing the COVID-19 pandemic, Lenovo said it would act on industry growth opportunities, including the surge of people working from home as a result of the paradigm shifts related to the pandemic.
"The management believes that these long-term structural trends could enlarge the addressable market for PCSD and cloud infrastructure demand, as well as accelerate development of 5G services," Lenovo said.
At the start of the month, Lenovo announced a pair of new ThinkPads that make use of the non-Pro version of AMD's Ryzen processors.
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