|By Business Wire||
|February 12, 2014 07:06 PM EST||
Lenovo Group today announced record results for its third fiscal quarter ended December 31, 2013, driven by strong global execution, an innovative product portfolio and an increasing mix of PC Plus revenues. Quarterly revenue was US$10.8 billion, a 15 percent increase year-over-year, passing the US$10 billion milestone for the first time ever. Third quarter profit grew even faster with pre-tax income increasing 30 percent year-over-year to US$321 million, while earnings also grew 30 percent year-over-year to US$265 million. Lenovo shipped a record 32.6 million devices in the quarter or nearly 5 devices every second. Lenovo’s third quarter mix of sales from its Mobile Internet and Digital Home division which develops PC Plus products such as smartphones, tablets and smart TVs, was 16 percent of total revenues, up from 11 percent one year ago and seven percent two years ago, with steadily improving profitability.
For the third straight quarter, Lenovo was the world’s largest PC vendor*, with its highest-ever quarterly market share of 18.5 percent, up 2.4 points year-over-year. Record high share in EMEA, Asia Pacific and China with number one positions in five of the seventh largest PC markets globally – supported this strong performance. Lenovo’s PC shipments for the third fiscal quarter were 15.3 million units, again making it the fastest growing of the top five PC vendors. This was also the 19th quarter in a row that Lenovo outperformed the industry as a whole, growing at a 14 point premium to the market.
Also for a third straight quarter, Lenovo’s combined shipments of smartphones and tablets – 17.3 million devices – surpassed the 15.3 million PCs it sold. It also continued to be the world’s fourth largest smartphone supplier with 4.8 percent share, growing shipments 47 percent year-over-year, driven by excellent performance of its smartphone launches in a number of new markets. In tablets, Lenovo had a record high of 3.4 million shipments, up over 300 percent year-over-year. Tablet strength was driven by the launch of the Yoga Tablet, the world’s first multimode tablet. Together, these results clearly illustrate Lenovo’s PC Plus transformation.
“Lenovo had outstanding performance last quarter, delivering both record revenue and record profit. Leveraging strong execution of our strategy, innovative products and growth in our PC Plus business, we continue delivering on our commitment to improve our profitability and we are confident we will maintain this momentum in our existing businesses,” said Yang Yuanqing, Chairman and CEO of Lenovo. “Further, the Motorola and IBM server acquisitions that we just announced are a perfect fit with our PC Plus strategy. While our top priority now is full participation in the regulatory approvals process, I am confident that from day 1 after closing, these businesses will quickly begin contributing to our performance and develop into pillars for long-term, sustainable growth.”
The Company’s gross profit for the third fiscal quarter increased 15 percent year-over-year to US$1.36 billion, with gross margin at 12.6 percent. Operating profit for the quarter grew 37 percent year-over-year to US$334 million. Basic earnings per share for the third fiscal quarter was 2.56 US cents, or 19.85 HK cents. Net cash reserves as of December 31, 2013 totaled US$3.4 billion.
Lenovo’s China geography totaled US$4 billion in revenue in the third fiscal quarter, relatively stable year-over-year, accounting for 37 percent of the Company’s worldwide revenue. The performance of China reflected a temporary slowdown in the local PC market which has stabilized and is seeing improved pricing, while urbanization, corporate refresh and PC Plus product innovation are driving future demand. During the third quarter, Lenovo further strengthened its PC number-one position in China, with market share in China of 37.9, a 0.5 point year-over-year gain, was number two in smartphones and number three in tablets.
In the Asia Pacific geography, Lenovo’s revenue totaled US$1.6 billion for the third quarter, or 15 percent of the Company’s worldwide revenue, up 22 percent year-over-year. Solid execution drove strong growth of smartphone sales and tablets saw hypergrowth in ASEAN countries. Lenovo also regained its number 1 position in PCs, with a record market share of 15.9 percent, up 2.0 points year-over-year and reached a milestone of selling 1 million smartphones.
Lenovo’s revenue in the Europe/Middle East/Africa (EMEA) geography saw a 25 percent increase in the third fiscal quarter to reach US$2.9 billion, representing 27 percent of Lenovo’s worldwide revenue. During the quarter, Lenovo reinforced its strong PC number 2 position with PC shipments up 27 percent, outperforming the market by 33 percentage points by protecting enterprise PC sales and attacking in SMB and consumer focused PC spaces. Lenovo is now number one in 11 EMEA countries. Notably, EMEA also led the way in driving tablet sales, increasing shipments nearly 450 percent year-over-year.
The Americas geography revenue was US$2.3 billion for the third fiscal quarter, an increase of 36 percent year-over-year, representing 21 percent of the Company’s worldwide revenue. The Americas geography saw its PC shipments grow 28 percent, a 2.7 point share gain to reach 11 percent share, outperforming the market by 31 percentage points. Performance in Brazil – driven by strong management, scaling of a new plant and integration of CCE – resulted in PC shipment growth of 378 percent to a record 18.6 percent market share in the country. US commercial PC business continues to play a significant role in the Americas geography, with shipments up 21 percent YTY, and a 15 point premium to the market.
During the third fiscal quarter, Lenovo’s Laptop computers were the largest contributor to the Company’s revenue worldwide, generating 50 percent of Lenovo’s total revenue. Across the industry, laptop shipments were down 6.3 percent year-over-year. Despite this challenging environment, consolidated sales for Lenovo’s laptop PC business worldwide in the third fiscal quarter totaled US$5.4 billion, an increase of 11 percent year-over-year. The Company gained 2.7 share points and achieved a market share of 18.8 percent. During the third fiscal quarter, the Company announced the Lenovo A10, an affordable, ultra-portable, dual-mode laptop and the Company’s first to run Android 4.2 OS. Weighing less than 1kg and measuring just 17.3 mm at its thickest point, the Lenovo A10 is one of the thinnest and lightest consumer laptops in the market today.
Lenovo’s Desktop PC shipments grew 9.1 percent worldwide year-over-year during the third fiscal quarter, compared to an overall industry decrease of about 3 percent. As a result, Lenovo gained 2 share points year-over-year and achieved a market share of 18 percent. Consolidated sales of Lenovo desktop PCs in the third quarter increased by 12 percent year-over-year to US$ 3.2 billion, or 29 percent of the Company’s total revenue. During the quarter, Lenovo announced four new all-in-one desktop PCs, extending the Company’s lead in that competitive product category. Featured was the super-widescreen Lenovo B750, with its 29” display. According to IDC, Lenovo is number one in the worldwide AIO market, across both the consumer and commercial segments.
Consolidated sales of Lenovo’s Mobile Internet and Digital Home (MIDH) products, including smartphones and tablets increased 73 percent year-over-year during the third fiscal quarter to US$ 1.7 billion, representing 16 percent of the Company’s total revenue during the quarter. Tablet shipments grew by 326 percent year-over-year for a record 3.4 million units with 4.3 percent market share. During its third fiscal quarter, Lenovo announced its multimode Yoga Tablet featuring three unique modes: hold, tilt and stand, giving consumers a better way to use a tablet and an incredible 18 hours of battery life. Yoga Tablet was announced at a livestream launch event with actor Ashton Kutcher, who debuted as Lenovo’s newest product engineer. Also announced in the third quarter was Lenovo’s Miix2 8-inch tablet, a follow on from its popular predecessor, the Lenovo Miix Tablet.
LENOVO’S M&A TRACK RECORD AND RECENT ACQUISITIONS
Since closing its acquisition of IBM’s personal computer business and ThinkPad line in 2005, it has successfully managed six integrations including the joint venture with NEC in Japan, the acquisition of Medion in Germany, the acquisition of CCE in Brazil, the strategic partnership and joint venture with EMC in the US, the acquisition of Stoneware in the US and its joint venture with Compal in China. During this time, Lenovo has become the world’s number one PC company, number 2 PC + Tablet maker, number three Smart Connected Device maker, all while growing revenue and profitability many times over.
Lenovo’s recently announced investments in Motorola Mobility and the IBM server business are logical next steps in the successful “PC Plus” strategy. Upon close of the IBM server transaction, Lenovo will be the number 3 server player globally in a business with higher margins than PCs. With Motorola’s close, Lenovo becomes a strong number three smartphone maker. A range of cost saving and scaling opportunities, the iconic Motorola brand and the opportunity to expand Motorola’s global reach will quickly place this business on a path to tangible success. Upon close, Lenovo firmly believes they will accelerate the geographical reach and competitiveness of its existing smartphone, tablet and server businesses, while ensuring future growth is even stronger and more sustainable.
*see IDC data 4Q 2013
Lenovo (HKSE: 0992) (Pink Sheets: LNVGY) is a US$34 billion personal technology company – and the largest PC company in the world, serving customers in more than 160 countries. Dedicated to building exceptionally engineered PCs and mobile internet devices, Lenovo’s business is built on product innovation, a highly-efficient global supply chain and strong strategic execution. Formed by Lenovo Group’s acquisition of the former IBM Personal Computing Division, the company develops, manufactures and markets reliable, high-quality, secure and easy-to-use technology products and services. Its product lines include legendary Think-branded commercial PCs and Idea-branded consumer PCs, as well as servers, workstations, and a family of mobile internet devices, including tablets and smart phones. Lenovo, a global Fortune 500 company, has major research centers in Yamato, Japan; Beijing, Shanghai and Shenzhen, China; and Raleigh, North Carolina. For more information see www.lenovo.com.
For the fiscal quarter ended December 31, 2013
(in US$ millions, except per share data)
|Gross profit margin||12.6||%||12.7||%||-0.1pt|
|Expenses-to-revenue ratio||9.5||%||10.1||%||-0.6 pt|
|Other non-operating (expenses) / income||(13||)||3||n/a|
|Profit for the period||265||200||33||%|
|Profit attributable to equity holders||265||205||30||%|
|EPS (US cents)|
SYS-CON Events announced today that Linux Academy, the foremost online Linux and cloud training platform and community, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Linux Academy was founded on the belief that providing high-quality, in-depth training should be available at an affordable price. Industry leaders in quality training, provided services, and student certification passes, its goal is to c...
Feb. 23, 2017 04:15 AM EST Reads: 1,138
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at 20th Cloud Expo, Ed Featherston, director/senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
Feb. 23, 2017 03:45 AM EST Reads: 3,748
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
Feb. 23, 2017 03:45 AM EST Reads: 6,569
910Telecom exhibited at the 19th International Cloud Expo, which took place at the Santa Clara Convention Center in Santa Clara, CA, in November 2016. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and exchanges.
Feb. 23, 2017 03:00 AM EST Reads: 1,607
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
Feb. 23, 2017 03:00 AM EST Reads: 1,844
China Unicom exhibit at the 19th International Cloud Expo, which took place at the Santa Clara Convention Center in Santa Clara, CA, in November 2016. China United Network Communications Group Co. Ltd ("China Unicom") was officially established in 2009 on the basis of the merger of former China Netcom and former China Unicom. China Unicom mainly operates a full range of telecommunications services including mobile broadband (GSM, WCDMA, LTE FDD, TD-LTE), fixed-line broadband, ICT, data communica...
Feb. 23, 2017 01:15 AM EST Reads: 1,094
Zerto exhibited at SYS-CON's 18th International Cloud Expo®, which took place at the Javits Center in New York City, NY, in June 2016. Zerto is committed to keeping enterprise and cloud IT running 24/7 by providing innovative, simple, reliable and scalable business continuity software solutions. Through the Zerto Cloud Continuity Platform™, organizations can seamlessly move and protect virtualized workloads between public, private and hybrid clouds. The company’s flagship product, Zerto Virtual...
Feb. 23, 2017 12:45 AM EST Reads: 1,325
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, will present an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He will expound on the industry issues he frequently came up against as an analyst, and...
Feb. 23, 2017 12:00 AM EST Reads: 1,695
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of Soli...
Feb. 22, 2017 10:45 PM EST Reads: 665
"We're bringing out a new application monitoring system to the DevOps space. It manages large enterprise applications that are distributed throughout a node in many enterprises and we manage them as one collective," explained Kevin Barnes, President of eCube Systems, in this SYS-CON.tv interview at DevOps at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Feb. 22, 2017 09:45 PM EST Reads: 6,711
SYS-CON Events announced today that CA Technologies has been named "Platinum Sponsor" of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and 21st International Cloud Expo, which will take place in November in Silicon Valley, California.
Feb. 22, 2017 08:45 PM EST Reads: 1,873
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
Feb. 22, 2017 08:45 PM EST Reads: 1,405
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
Feb. 22, 2017 08:45 PM EST Reads: 1,338
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
Feb. 22, 2017 07:45 PM EST Reads: 7,826
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
Feb. 22, 2017 07:30 PM EST Reads: 1,212