News Feed Item

Lenovo Delivers Strong Growth and Hits Milestones in First Quarter 2014/15

Lenovo Group today reported results for its first fiscal quarter ended June 30, 2014, with quarterly revenue of US$10.4 billion, an 18 percent increase year-over-year while quarter pre-tax income increased 22 percent year-over-year to US$264 million. Earnings grew 23 percent year-over-year to US$214 million, while the Company hit market share and financial performance milestones.

Lenovo maintained its number three ranking in smart connected devices growing shipments by 28 percent year-over-year. It has been the world’s largest PC maker for five consecutive quarters with its highest-ever quarterly market share of 19.4 percent* up 2.7 points year-over-year, driven by big share gains in EMEA and the Americas. Lenovo’s PC shipments for the first fiscal quarter were up 15 percent to 14.5 million units, the 21st quarter in a row that Lenovo outperformed the industry as a whole. In tablets, Lenovo became the 3rd largest vendor with 2.3 million devices shipped, a growth of 67 percent or nearly 8 times the pace of this market. In smartphones, Lenovo sold more smartphones than PCs for the first time ever with record volume of 15.8 million units, up 39 percent. Despite fierce competition in China, Lenovo became the number 1 smartphone vendor in this country with 13 million phones sold.

The Company’s gross profit for the first fiscal quarter increased 13 percent year-over-year to US$1.3 billion, with gross margin at 13 percent. Operating profit for the quarter grew 40 percent year-over year to US$283 million. Basic earnings per share for the first fiscal quarter was 2.06 US cents, or 15.97 HK cents. Net cash reserves as of June 30, 2014, totaled US$3.58 billion.

“This has been a quarter of milestones for Lenovo – record PC share, a number three ranking in worldwide tablets for the first time, and an even stronger number four global smartphone position,” said Yuanqing Yang, Chairman and CEO of Lenovo. “As the PC industry recovers, the smartphone market continues its shift from premium to mainstream, and our acquisitions of Motorola Mobility and IBM x86 proceed toward completion, we see even more opportunity to keep growing rapidly. Lenovo continues to outperform the market and meet our commitments to improve profitability in our core businesses, while building strong pillars for future growth across our entire portfolio.”


China totaled US$3.8 billion in revenue in the first fiscal quarter, an increase of 2 percent year-over-year, accounting for 36 percent of the Company’s worldwide revenue. Lenovo protected the China profit pool and improved margins there by 0.3 points year-over-year to achieve operating margins of 5.5 percent. Operationally, it strengthened its leadership in PCs with 37.1% share. According to IDC, Lenovo surpassed Samsung to become the largest smartphone maker in the country. In mobile devices, Lenovo continued to improve profitability with broadened routes to market and a greater focus on internet-enabled, open market sales.

In Europe/Middle East/Africa (EMEA), Lenovo had an extremely strong quarter with revenue increasing 49 percent or US$921 million year-over-year to reach US$2.8 billion, or 27 percent of Lenovo’s first quarter worldwide revenue. EMEA saw record highs in PC share and operating margin, hitting the number one position in notebooks for the first time and achieving a number one position in 15 EMEA countries, while smartphone shipments surpassed 1 million devices for the first time. During the quarter, Lenovo’s PC shipments in EMEA increased 4.8 share points year-over-year in the quarter, to reach an all time high of 18 percent.

In Asia Pacific, Lenovo’s revenue was up $270 million to reach US$1.6 billion in the first quarter, or 15 percent of the Company’s worldwide revenue. Lenovo’s PC market share in Asia Pacific was up nearly two share points year-over-year to reach 15 percent. Smartphone shipments in the region were 1.5 million units, up 3.7 times from the same quarter a year earlier. Operating profit margin in the region was 4.1 percent, up dramatically from 0.9 percent a year earlier. Lenovo grew its number one position in Japan, while improved performance in this market drove the region’s robust profitability improvements.

In the Americas, revenue was US$2.2 billion in the first fiscal quarter, an increase of 19 percent year-over-year, comprising 22 percent of the Company’s worldwide revenue. Operating profit margin was 1.1 percent, a 0.3 point decrease compared to last year as the Company continued investments in Latin America and Brazil. The Americas saw a record high PC market share of 12.5 percent, up 23.7 percent or 3 market share points year-over-year, as well as record share in the United States of 11.3 percent, which was up 1.5 points year-over-year.


During the first fiscal quarter, Lenovo’s Laptop computers generated 49 percent of Lenovo’s total revenue. Across the industry, laptop shipments were down 3.7 percent year-over-year, an improvement from the year before when declines were nearly 13 percent year-over-year driven by corporate refresh and innovations in the category. Helped by this stabilizing trend, consolidated revenues for Lenovo’s laptop PC business worldwide in the first fiscal quarter totaled US$5.1 billion, an increase of 12 percent year-over-year. The Company gained nearly four share points and achieved a market share of 21 percent. During the first quarter, Lenovo announced the ThinkPad 10, a ten-inch premium multimode business tablet ideally suited for business users, as well as the Company’s first consumer Chromebooks, the N20 and N20p. These Chromebooks offer consumers two ways to enjoy the Chrome experience in a thin and light form. Lenovo also introduced the B50 laptop for small businesses, and the Z40 and Z50 laptops for more entertainment focused users.

Lenovo took the number one position in Desktop PC shipments which were up 12.1 percent year-over-year during the first fiscal quarter, compared to an overall industry increase of 2.4 percent. The 1.5 share point increase year-over-year gave Lenovo a desktop market share of 17.5 percent. Consolidated revenues of Lenovo desktop PCs were up 20 percent year-over-year in the first quarter to US$3.0 billion, or 29 percent of the Company’s total revenue. During the first quarter, Lenovo introduced several new desktop PCs starting with the A Series A540 AIO (all-in-one) desktop built for families and equipped with the latest audio and video features for enjoying digital content. Lenovo also revealed its newly redesigned ThinkStation P300 entry-level workstation, featuring unparalleled flexibility, ideal for professionals who need ISV application certification hardware at a reasonable price.

Consolidated revenues of Lenovo’s Mobile Device Business**, including smartphones and tablets, increased 32 percent year-over-year during the first fiscal quarter to US$1.6 billion, representing 15 percent of the Company’s total revenue during the quarter. In China, Lenovo achieved the number one position in smartphones, while it became the worldwide number 3 maker of tablets. During the quarter, Lenovo announced several new A-series Android tablets, offering configurations and screen sizes to match consumer needs for both ultra-portable tablets and multimedia performers. The portfolio includes the seven-inch TAB A7-50, the eight-inch TAB A8, and the ten-inch TAB A10, equipped with an optional Bluetooth keyboard.

Lenovo continues to drive innovation across Smart Connected Devices, with new and exciting smartphone, ecosystem and enterprise products coming in the second half of its fiscal year. Lenovo is exploring new internet-centric growth opportunities as evidenced in its recent announcement of the New Business Development (NBD) platform where Lenovo is engaging partners to drive innovation across new hardware categories. Finally, Lenovo’s efforts on both the Motorola Mobility and IBM x86 server business transactions remain on track and the Company remains confident to close both before the end of the year.

* See IDC data 2Q 2014, all market share data from IDC

** Previously these revenues were reported under Mobile Internet and Digital Home (MIDH). Beginning in this quarter, they will be reported under the Mobile Device Business heading.


Lenovo (HKSE: 992) (ADR: LNVGY) is a US$39 billion personal technology company, 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 smartphones. As a global Fortune 500 company, Lenovo has major research centers in Yamato, Japan; Beijing, Shanghai and Shenzhen, China; Sao Paulo, Brazil, and Raleigh, North Carolina. For more information see www.lenovo.com.



For the fiscal quarter ended June 30, 2014

(in US$ millions, except per share data)



Revenue 10,395   8,787   18 %
Gross profit 1,349   1,191   13 %
Gross profit margin 13.0 % 13.6 % -0.6pts
Operating expenses (1,066 ) (989 ) 8 %
Expenses-to-revenue ratio 10.3 % 11.3 % -1.0pts
Operating profit 283   202   40 %
Other non-operating (expense)/ income (19 ) 13   N/A  
Pre-tax income 264   215   22 %
Taxation (53 ) (45 ) 17 %
Profit for the period 211   170   24 %
Non-controlling interests 3   4   -27 %
Profit attributable to equity holders 214   174   23 %
EPS (US cents)










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 Niagara Networks will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
@ThingsExpo has been named the Top 5 Most Influential Internet of Things Brand by Onalytica in the ‘The Internet of Things Landscape 2015: Top 100 Individuals and Brands.' Onalytica analyzed Twitter conversations around the #IoT debate to uncover the most influential brands and individuals driving the conversation. Onalytica captured data from 56,224 users. The PageRank based methodology they use to extract influencers on a particular topic (tweets mentioning #InternetofThings or #IoT in this ...
Virgil consists of an open-source encryption library, which implements Cryptographic Message Syntax (CMS) and Elliptic Curve Integrated Encryption Scheme (ECIES) (including RSA schema), a Key Management API, and a cloud-based Key Management Service (Virgil Keys). The Virgil Keys Service consists of a public key service and a private key escrow service. 

In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, will discuss how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team a...
OnProcess Technology has announced it will be a featured speaker at @ThingsExpo, taking place November 1 - 3, 2016, in Santa Clara, California. Dan Gettens, OnProcess’ Chief Analytics Officer, will discuss how Internet of Things (IoT) data can be leveraged to predict product failures, improve uptime and slash costly inventory stock. @ThingsExpo is an annual gathering of IoT and cloud developers, practitioners and thought-leaders who exchange ideas and insights on topics ranging from Big Data in...
SYS-CON Events announced today that Cemware will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Use MATLAB functions by just visiting website mathfreeon.com. MATLAB compatible, freely usable, online platform services. As of October 2016, 80,000 users from 180 countries are enjoying our platform service.
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and 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.
SYS-CON Events announced today that StarNet Communications will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. StarNet Communications’ FastX is the industry first cloud-based remote X Windows emulator. Using standard Web browsers (FireFox, Chrome, Safari, etc.) users from around the world gain highly secure access to applications and data hosted on Linux-based servers in a central data center. ...
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and ...
SYS-CON Events announced today that eCube Systems, the leading provider of modern development tools and best practices for Continuous Integration on OpenVMS, will exhibit 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. eCube Systems offers a family of middleware products and development tools that maximize return on technology investment by leveraging existing technical equity to meet evolving business needs. ...
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes ho...
Digitization is driving a fundamental change in society that is transforming the way businesses work with their customers, their supply chains and their people. Digital transformation leverages DevOps best practices, such as Agile Parallel Development, Continuous Delivery and Agile Operations to capitalize on opportunities and create competitive differentiation in the application economy. However, information security has been notably absent from the DevOps movement. Speed doesn’t have to negat...
Join Impiger for their featured webinar: ‘Cloud Computing: A Roadmap to Modern Software Delivery’ on November 10, 2016, at 12:00 pm CST. Very few companies have not experienced some impact to their IT delivery due to the evolution of cloud computing. This webinar is not about deciding whether you should entertain moving some or all of your IT to the cloud, but rather, a detailed look under the hood to help IT professionals understand how cloud adoption has evolved and what trends will impact th...
Successful digital transformation requires new organizational competencies and capabilities. Research tells us that the biggest impediment to successful transformation is human; consequently, the biggest enabler is a properly skilled and empowered workforce. In the digital age, new individual and collective competencies are required. In his session at 19th Cloud Expo, Bob Newhouse, CEO and founder of Agilitiv, will draw together recent research and lessons learned from emerging and established ...