Welcome!

News Feed Item

Lenovo Posts Third Quarter 2013/14 Results

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.

GEOGRAPHIC OVERVIEW

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.

PRODUCT OVERVIEW

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

ABOUT LENOVO

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.

         

LENOVO GROUP

FINANCIAL SUMMARY

For the fiscal quarter ended December 31, 2013

 

(in US$ millions, except per share data)

 
 
Q3
13/14
   
Q3
12/13
   
Y/Y
CHG
Revenue 10,789       9,359       15 %
Gross profit 1,363       1,190       15 %
Gross profit margin 12.6 %     12.7 %     -0.1pt  
Operating expenses (1,029 )     (947 )     9 %
Expenses-to-revenue ratio 9.5 %     10.1 %     -0.6 pt  
Operating profit 334       243       37 %
Other non-operating (expenses) / income (13 )     3       n/a  
Pre-tax income 321       246       30 %
Taxation (56 )     (46 )     20 %
Profit for the period 265       200       33 %
Non-controlling interests 0       (5 )     n/a  
Profit attributable to equity holders 265       205       30 %
EPS (US cents)
Basic 2.56 1.99
Diluted 2.52       1.96        

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that AppNeta, the leader in performance insight for business-critical web applications, will exhibit and present at SYS-CON's @DevOpsSummit at Cloud Expo New York, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. AppNeta is the only application performance monitoring (APM) company to provide solutions for all applications – applications you develop internally, business-critical SaaS applications you use and the networks that deli...
As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
In the rush to compete in the digital age, a successful digital transformation is essential, but many organizations are setting themselves up for failure. There’s a common misconception that the process is just about technology, but it’s not. It’s about your business. It shouldn’t be treated as an isolated IT project; it should be driven by business needs with the committed involvement of a range of stakeholders.
SYS-CON Events announced today that EastBanc Technologies will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. EastBanc Technologies has been working at the frontier of technology since 1999. Today, the firm provides full-lifecycle software development delivering flexible technology solutions that seamlessly integrate with existing systems – whether on premise or cloud. EastBanc Technologies partners with p...
SYS-CON Events announced today that BMC Software has been named "Siver Sponsor" of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. BMC is a global leader in innovative software solutions that help businesses transform into digital enterprises for the ultimate competitive advantage. BMC Digital Enterprise Management is a set of innovative IT solutions designed to make digital business fast, seamless, and optimized from mainframe to mo...
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. 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 Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty ...
SoftLayer operates a global cloud infrastructure platform built for Internet scale. With a global footprint of data centers and network points of presence, SoftLayer provides infrastructure as a service to leading-edge customers ranging from Web startups to global enterprises. SoftLayer's modular architecture, full-featured API, and sophisticated automation provide unparalleled performance and control. Its flexible unified platform seamlessly spans physical and virtual devices linked via a world...
SYS-CON Events announced today that ContentMX, the marketing technology and services company with a singular mission to increase engagement and drive more conversations for enterprise, channel and SMB technology marketers, has been named “Sponsor & Exhibitor Lounge Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, New York. “CloudExpo is a great opportunity to start a conversation with new prospects, but what happens after the...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
The essence of data analysis involves setting up data pipelines that consist of several operations that are chained together – starting from data collection, data quality checks, data integration, data analysis and data visualization (including the setting up of interaction paths in that visualization). In our opinion, the challenges stem from the technology diversity at each stage of the data pipeline as well as the lack of process around the analysis.
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit y...
18th Cloud Expo, taking place June 7-9, 2016, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some...
SYS-CON Events announced today that Isomorphic Software will exhibit at SYS-CON's [email protected] at Cloud Expo New York, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Isomorphic Software provides the SmartClient HTML5/AJAX platform, the most advanced technology for building rich, high-productivity enterprise web applications for any device. SmartClient couples the industry’s broadest, deepest UI component set with a java server framework to deliver an end-...