Lenovo has reported results for its third fiscal quarter ended 31 December, 2012. In its best quarter ever, Lenovo continued to outgrow the market in all geographies with record sales, pre-tax income and earnings.
Lenovo continued its push towards becoming the world’s leading PC maker and emerging global leader in PC Plus devices, with another quarterly sales record of $9,4-billion – a 12% year-over-year increase.
For 13 consecutive quarters, Lenovo has been the fastest growing major PC company. Lenovo was also recognised by IDC as the world’s third largest maker of “smart connected devices”, such as tablets, PCs and smartphones. At the same time, Lenovo had another quarter of record pre-tax income at $246-million, demonstrating that such rapid growth is being achieved while profits increase.
Lenovo’s third quarter earnings were also a record at $205-million, an increase of 34% over the last year, with gross margin at 11,8%.
Gross profit for the third fiscal quarter increased 15% year-over-year, to $1,1-billion, while operating profit for the third quarter was $243-million, a 26% increase year-over-year. Basic earnings per share for the third fiscal quarter were 1.99 US cents, or 15.42 HK cents. Net cash reserves as of 31 December, 2012, totalled $4,2-billion.
The company’s “Protect and Attack” strategy – protecting the two profit pools of global commercial PC and the China businesses, while attacking three high growth opportunities in emerging markets, global consumer and PC Plus products, such as smartphones, tablets and smart TVs – continued to deliver results.
This quarter, Attack businesses delivered 50% of the company’s revenues, a significant increase from four years ago when the company first launched the strategy and attack revenues were 32%.
Further demonstrating the company’s balance, its Mobile Internet and Digital Home (MIDH) revenues, which includes its smartphone, tablet and smart TV businesses, accounted for a record 11% of Company revenue this quarter, up 77% year over year. And for the first time, its smartphone business in China became profitable.
During the third fiscal quarter, Lenovo’s worldwide PC shipments grew 7,9% to an all time high of 15,9% market share, in a difficult market that was down 7,8% year-over-year. This was the 15th quarter in a row the company grew faster than the industry. Lenovo gained share points in every geography and every product category and in every respective customer segment.
While the company’s organic growth continues to drive the majority of its success, shareholders should note that Lenovo has closed the joint venture and acquisitions announced in the previous two quarters, including its strategic partnership with EMC that includes a joint venture in EMC’s Iomega business; its acquisition of CCE, a leading PC+company in Brazil, and its acquisition of Stoneware, a US-based cloud computing company.
Further, the company reports that integration of all mergers and acquisitions transactions announced in the last three years are well on-track, and in many cases ahead of schedule.
Lenovo recently re-aligned its product development and supply chain organisations to create two new groups: the Lenovo Business Group, which will focus on mainstream PCs and MIDH products; and the Think Business Group, which will focus on Think-branded products targeting high-end consumers and enterprises.
Today, Lenovo is twice as large and much more diverse than it was when its existing structure was established over four years ago. That structure was ideal in supporting Lenovo’s business when it was mostly focused on its China PC and global commercial PC business.
Today, the company has built strong consumer, mobile and emerging markets businesses globally, so the change was proactively initiated to drive continued performance across all of these businesses, stay ahead of consumer demands, while driving speed, agility and innovation.
Lenovo in Europe Middle East and Africa grew PC shipments by 25,5% and became the second largest PC seller in this region, with 11% market share, an increase of 3.2 share points year-over-year.
This was the company’s first ever quarter to reach the number two position in the region. These achievements were made despite the headwind of overall industry decline in shipments of 11% across the region. The company had consolidated sales in the third quarter of US$2,3-billion, a year-over-year improvement of 17%, good for 25% of Lenovo’s total worldwide sales.
Lenovo continued its push towards becoming the world’s leading PC maker and emerging global leader in PC Plus devices, with another quarterly sales record of $9,4-billion – a 12% year-over-year increase.
For 13 consecutive quarters, Lenovo has been the fastest growing major PC company. Lenovo was also recognised by IDC as the world’s third largest maker of “smart connected devices”, such as tablets, PCs and smartphones. At the same time, Lenovo had another quarter of record pre-tax income at $246-million, demonstrating that such rapid growth is being achieved while profits increase.
Lenovo’s third quarter earnings were also a record at $205-million, an increase of 34% over the last year, with gross margin at 11,8%.
Gross profit for the third fiscal quarter increased 15% year-over-year, to $1,1-billion, while operating profit for the third quarter was $243-million, a 26% increase year-over-year. Basic earnings per share for the third fiscal quarter were 1.99 US cents, or 15.42 HK cents. Net cash reserves as of 31 December, 2012, totalled $4,2-billion.
The company’s “Protect and Attack” strategy – protecting the two profit pools of global commercial PC and the China businesses, while attacking three high growth opportunities in emerging markets, global consumer and PC Plus products, such as smartphones, tablets and smart TVs – continued to deliver results.
This quarter, Attack businesses delivered 50% of the company’s revenues, a significant increase from four years ago when the company first launched the strategy and attack revenues were 32%.
Further demonstrating the company’s balance, its Mobile Internet and Digital Home (MIDH) revenues, which includes its smartphone, tablet and smart TV businesses, accounted for a record 11% of Company revenue this quarter, up 77% year over year. And for the first time, its smartphone business in China became profitable.
During the third fiscal quarter, Lenovo’s worldwide PC shipments grew 7,9% to an all time high of 15,9% market share, in a difficult market that was down 7,8% year-over-year. This was the 15th quarter in a row the company grew faster than the industry. Lenovo gained share points in every geography and every product category and in every respective customer segment.
While the company’s organic growth continues to drive the majority of its success, shareholders should note that Lenovo has closed the joint venture and acquisitions announced in the previous two quarters, including its strategic partnership with EMC that includes a joint venture in EMC’s Iomega business; its acquisition of CCE, a leading PC+company in Brazil, and its acquisition of Stoneware, a US-based cloud computing company.
Further, the company reports that integration of all mergers and acquisitions transactions announced in the last three years are well on-track, and in many cases ahead of schedule.
Lenovo recently re-aligned its product development and supply chain organisations to create two new groups: the Lenovo Business Group, which will focus on mainstream PCs and MIDH products; and the Think Business Group, which will focus on Think-branded products targeting high-end consumers and enterprises.
Today, Lenovo is twice as large and much more diverse than it was when its existing structure was established over four years ago. That structure was ideal in supporting Lenovo’s business when it was mostly focused on its China PC and global commercial PC business.
Today, the company has built strong consumer, mobile and emerging markets businesses globally, so the change was proactively initiated to drive continued performance across all of these businesses, stay ahead of consumer demands, while driving speed, agility and innovation.
Lenovo in Europe Middle East and Africa grew PC shipments by 25,5% and became the second largest PC seller in this region, with 11% market share, an increase of 3.2 share points year-over-year.
This was the company’s first ever quarter to reach the number two position in the region. These achievements were made despite the headwind of overall industry decline in shipments of 11% across the region. The company had consolidated sales in the third quarter of US$2,3-billion, a year-over-year improvement of 17%, good for 25% of Lenovo’s total worldwide sales.