Lenovo Reports Q2 Results Revealing a Major Profit Jump

Lenovo Group, a Chinese personal computer maker that is the largest PC maker in the world, reported its second quarter financial results this week.

The company revealed a quarterly profit jump of 20% on strong personal computer sales. This also beat what analysts had been expecting.

The company’s net profit in the quarter ended September rose to $202 million, compared with an average estimate of $199.59 million by eight analysts, per Refinitiv data. Revenue rose 1% to $13.52 billion, compared to an average estimate of $13.73 billion by 11 analysts.

“Looking ahead, the global demand for technology products is expected to remain volatile amid a complex macro environment,” the company said.

It added, “However, going forward, Lenovo is well-positioned to manage complex and dynamic market conditions.”
Chairman and CEO Yuanqing Yang said on the earnings call, “Last quarter, we delivered another quarter of solid performance despite the ongoing geopolitical uncertainties. We significantly improved the profit with a pretax income of 45% year-on-year to USD 310 million and a net income up 20% year-on-year to USD 202 million while maintaining a stable revenue of USD 13.5 billion.”

“Our Intelligent Device Group achieved 5% profit margin for the first time, thanks to solid profit contribution from both PC and smart devices and mobile business. PC and Smart Devices, in particular, delivered a strong profit margin of 5.7% with more than 4% revenue growth in spite of the supply shortages and the macroeconomic situation. Software & Services revenue grew 31% year-on-year.”

He added, “In PCs, we maintained our clear #1 position by delivering record high shipments with over 7% growth year-on-year. We outperformed our growing market by 4 points.”

“Volume in high-growth and premium categories such as Workstation, Thin and Light, Visuals and Gaming PCs continues to outgrow the market by double digits,” He also said.

He continued, “Looking forward, while the macro challenges may continue, we are confident that we will continue to drive premium-to-market growth and industry-leading profitability. We will achieve this through innovation, operational excellence and strong execution in high-growth and the premium categories. We will also continue to transform our business model and grow in Software & Services.”

“Our Mobile Business delivered its fourth consecutive profitable quarter. Pretax income grew USD 57 million year-on-year, reaching the highest since the Motorola acquisition. In our stronghold, Latin America, activation grow almost 7% year-on-year. Revenue, profit and market share all grew year-on-year.”

Disclaimer: We have no position in Lenovo Group Limited (OTCMKTS: LNVGY) and have not been compensated for this article.