​Lenovo 'turns the corner' as PC sales accelerate

PC giant aims to return smartphone business to health and build up its data center business.
Written by Steve Ranger, Global News Director

PC giant Lenovo Group said progress in transforming the business continues as it saw revenue grow 19 percent year-on-year to $11.9bn and profit hit $77m, up from a $72m loss in the same quarter the previous year.

Unveiling its first quarter results, Lenovo chairman and CEO Yang Yuanqing said the company had "passed the turning point" and that there was rising momentum in business performance.

He said the company planned to return its smartphone business to health; build the data center business into a sustainable growth and profit engine; and invest in IoT and cloud projects.

"Lenovo has turned a corner in its transformation and enters a new phase of growth," the company said, as a result of its plans to consolidate some businesses.


Lenovo's PC business remains its key revenue engine.

Image: Lenovo

Lenovo has combined its Personal Computer and Smart Devices Group with its Mobile Business Group to create a new Intelligent Devices Group (IDG). This group saw revenue growth of 14 percent year-on-year, reaching to $9.95bn, Lenovo said, with PC market share gains in every region.

In particular, the PC and Smart Devices business -- which drives the majority of Lenovo's revenues and profit -- saw 19 percent year-on-year revenue growth. Lenovo said it is the fastest growing player by units among the top five global PC makers. It is currently tied for first place in the PC market with HP, according to Gartner. In November, Lenovo signed a deal with Fujitsu to form a joint venture to sell PCs, likely to account for part of that growth.

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The Mobile Business Group part of IDG -- which includes the Motorola Mobility smartphone business -- saw operating expenses cut by more than $100m, with the aim of getting costs below $1bn, narrowing its losses for the quarter.

Lenovo's Data Center Group, reported a record revenue quarter of $1.6 billion -- up 67.8 percent compared to the same quarter a year earlier, and narrowing its pre-tax loss to $63m. Lenovo said this performance was driven by growth in software-defined infrastructure, high-performance computing and hyperscale computing, which it said grew by triple-digits year-on-year, while flash-based storage saw 42 percent year-on-year growth. Lenovo noted it is now the top supplier on the the TOP500 supercomputer list with 117 included.

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