Lenovo sees 2Q profit climb to $262M, ships 35.6M devices

Chinese hardware maker clocks a 19 percent increase in profit on revenues totaling US$10.5 billion in the second quarter, shipping a "record" 35.6 million devices. But sales from its mobile division drop 6 percent.
Written by Eileen Yu, Senior Contributing Editor

Lenovo Group has clocked a 19 percent climb in net income in its second quarter earnings, shipping a "record" 35.6 million devices. But its mobile devision sees its sales dip 6 percent to US$1.4 billion. 

Currently the world's largest PC maker, the Chinese hardware manufacturer reported a year-on-year 7 percent growth in revenue to US$10.5 billion, churning US$262 million in net income. It shipped a "record high" of 35.6 million smartphones, PCs, and tablets worldwide, the company said. 

However, sales from its mobile devices unit including smartphones and tablets dipped 6 percent in the second quarter to US$1.4 billion, accounting for 13 percent of total revenue. Despite the drop, Lenovo said it saw record smartphone shipments worldwide which grew 38 percent, driven by sales in more than 45 markets. 

Revenue from China dropped 2 percent to US$3.8 billion, accounting for 36 percent of Lenovo's total revenue, while the Asia-Pacific region contributed 15 percent with revenue totaling US$1.6 billion for the quarter. In Europe, revenues climbed 33 percent to hit US$3 billion, marking a "record" contribution from the region. Its PC market share in EMEA rose almost 44 percent, with the vendor taking No. 1 market position in 16 countries across the region. 

Its U.S. revenue clocked at US$2.1 billion on flat growth, accounting for 20 percent of total revenue, and the Chinese PC maker's market share there was 11.3 percent. 

Lenovo CEO Yang Yuanqing said in the statement: "Not only did we reach nearly 20 percent share in PCs, but we became No. 1 in the broader PC+ tablet market for the first time. And in the last month, we successfully closed both our Motorola Mobility and IBM x86 acquisitions. With these two deals, we are now No. 3 in both businesses, but we are not satisfied.

"We will replicate our success in PCs by outgrowing the market to challenge the top two. Mobile and Enterprise are now our new growth engines, and over time, like PCs, they will become our profit pool as well."

Laptop PC sales were the biggest contributor to the company's global revenue, churning US$5.5 billion and accounting for 52 percent of total revenue. Sales from desktop PCs grew 11 percent to US$3 billion, contributing 29 percent to overall revenue. 

In a separate announcement Thursday, Lenovo said it has appointed Yahoo co-founder Jerry Yang as a member of its board with immediate effect. Also a director at Alibaba Group, Yang had previously served as a board observer at Lenovo, a role which he has now dropped. 

Yang said: "Jerry has made great contributions since becoming a board observer... Jerry's proven track record as an entrepreneur, his unique global perspective, and his pioneering spirit as one of the great innovators of the internet era are all qualities that we value at Lenovo. 

"Jerry will remain an important voice in our boardroom as we continue to build Lenovo into a diverse, well respected global technology leader," he said. 

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