Lenovo Q2 Momentum Powered By 9th Consecutive YoY Quarterly Revenue Growth, Strong, Positive PTI and Net Income Growth
7.11.2019 07:20:00 EET | Business Wire | Press release
Lenovo Group (HKSE: 992) (PINK SHEETS: LNVGY) today announced Group revenue in the second quarter reached US$13.5 billion, the ninth consecutive, year-on-year quarter of growth. Pre-tax income grew 45% compared to the same quarter a year earlier, to US$310 million. Net income also increased 20% year-on-year to US$202 million. Revenue mix continues to be balanced across the company’s four geographies (Americas, Asia Pacific, China, EMEA) with each reporting more than 20% share of revenue.
Basic earnings per share for the second quarter were 1.69 US cents or 13.23 HK cents. Lenovo’s Board of Directors declared an interim dividend of 6.3 HK cents per share.
“During the quarter we were pleased to see our growth momentum deliver continued solid financial performance amidst a complex and dynamic global trading environment. This success is a testament to our commitment to innovation, to our customers across 180 markets around the world, and to how the world continues to embrace our vision to deliver smarter technology for all,” said Yang Yuanqing, Lenovo Chairman and CEO.
Global trade environment
Although global trade and geo-political uncertainties persist, they continue to have a negligible material impact on the financial performance of the company. This quarter’s results highlight the consistently high degree at which Lenovo continues to perform. Lenovo’s global footprint, flexible, majority-owned manufacturing base and ongoing strong financial performance remain competitive differentiators propelling the company’s market-leading position. Going forward, Lenovo is well positioned to manage complex and dynamic market conditions, while continuing to deliver sustainable long-term results.
Business Group Overview
The strong results are led by the Intelligent Devices Group (IDG). The PC and Smart Devices Group (PCSD), one of the two IDG business units, reported US$10.7 billion in revenue and record PTI margin of 5.7%. Sales volume in PCs enjoyed strong growth year-on-year of 7.1%, resulting in overall PCSD revenue growth of 4.1% year-on-year. Pre-tax income was US$612 million, up US$97 million year-on-year.
In PCs, volume again outgrew the market, which is continuing to recover. Lenovo holds 24.4% of the global PC market, sustaining its position as the worldwide #1 in PCs. Growth came from high-growth and premium categories, including Workstation, Thin and Light, Visuals and Gaming PCs – all of which had double-digit volume growth year-on-year. In the future the PCSD group will continue to drive premium-to-market growth and industry leading profitability as it continues to focus on customer insights to innovate across the portfolio.
IDG’s second business unit, the Mobile Business Group (MBG), posted its fourth consecutive quarter of profitability and positive PTI, improving US$57 million year-on-year. While there was a small revenue decline reported year-on-year (5.7% to US$1.5 billion), the group continues to focus on inventory controls, portfolio efficiency and diligent cost controls to help expand margins. The company’s Latin America stronghold continues to see revenue, profit and market share grow year-on-year. In North America Lenovo moved up two places in the industry rankings from the previous quarter to number four. In addition, revenue continues to outgrow the market with profit continuing to improve. Going forward, Lenovo will continue its investment in its mobile business to drive ongoing and future growth opportunities in select new and profitable markets.
The Data Center Group (DCG) successfully navigated challenging circumstances during the quarter and reports its 9th consecutive year-on-year quarter of narrowing losses. Overall revenue in DCG declined 13.8% as a result of lower prices for key components and softness in demand from some of the largest hyperscale customers. Revenue – excluding Hyperscale – grew almost 13% year-on-year with China reporting more than a 47% increase in non-hyperscale revenue compared to the same quarter a year ago. In addition, there was strong double-digit growth in Storage, Software Defined Infrastructure and High Performance Computing as a result of an expanded storage portfolio, strong ThinkAgile offerings and new HPC project wins. Looking ahead, the data center group will continue its growth in non-hyperscale including fast-growing segments like SDI and storage, while also investing in new Edge, Telco and AI infrastructure opportunities. The Hyperscale customer base is expected to expand and return to growth in the second half of this fiscal year.
Software and Services heading to US$1 billion business
Software and Services revenue* grew 35% year-on-year, reaching almost US$900 million. Device as a Services (DaaS), premier support service and managed services all grew significantly to contribute to this performance and ongoing diversification of the company’s revenue streams. This business is expected to exceed US$1 billion per quarter very soon.
* invoiced revenue
About Lenovo
Lenovo (HKSE: 992) (ADR: LNVGY) is a US$50 billion Fortune Global 500 company, with 57,000 employees and operating in 180 markets around the world. Focused on a bold vision to deliver smarter technology for all, we are developing world-changing technologies that create a more inclusive, trustworthy and sustainable digital society. By designing, engineering and building the world’s most complete portfolio of smart devices and infrastructure, we are also leading an Intelligent Transformation – to create better experiences and opportunities for millions of customers around the world. To find out more visit https://www.lenovo.com, follow us on LinkedIn, Facebook, Twitter, YouTube, Instagram, Weibo and read about the latest news via our StoryHub.
|
LENOVO GROUP FINANCIAL SUMMARY For the second quarter ended September 30, 2019 (in US$ millions, except per share data) |
||||
|
|
|
|
Q2 18/19 |
|
|
Revenue |
|
13,522 |
13,380 |
1% |
|
Gross profit |
|
2,183 |
1,794 |
22% |
|
Gross profit margin |
|
16.1% |
13.4% |
2.7pts |
|
Operating expenses |
|
(1,741) |
(1,504) |
16% |
|
Expenses-to-revenue ratio |
|
12.9% |
11.2% |
1.7pts |
|
Operating profit |
|
442 |
290 |
53% |
|
Other non-operating expenses - net |
|
(132) |
(77) |
73% |
|
Pre-tax income |
|
310 |
213 |
45% |
|
Taxation |
|
(66) |
(40) |
67% |
|
Profit for the period |
|
244 |
173 |
40% |
|
Non-controlling interests |
|
(42) |
(5) |
716% |
|
Profit attributable to equity holders |
|
202 |
168 |
20% |
|
EPS (US cents) |
|
|
|
|
|
Basic |
1.69 |
1.41 |
0.28 |
|
|
Diluted |
1.62 |
1.40 |
0.22 |
|
To view this piece of content from cts.businesswire.com, please give your consent at the top of this page.
View source version on businesswire.com: https://www.businesswire.com/news/home/20191106006181/en/
Contact information
Hong Kong – Angela Lee,
angelalee@lenovo.com, +852 2516 4810
London – Charlotte West, cwest@lenovo.com, +44 7825 605720
Zeno Group - LenovoWWcorp@zenogroup.com
About Business Wire
For more than 50 years, Business Wire has been the global leader in press release distribution and regulatory disclosure.
Subscribe to releases from Business Wire
Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from Business Wire
Vertex Presents New Data on ALYFTREK ® at European Cystic Fibrosis Conference5.6.2026 19:00:00 EEST | Press release
Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) today announced data demonstrating the potentially transformative impact of treating cystic fibrosis (CF) with ALYFTREK ® (vanzacaftor/tezacaftor/deutivacaftor) in children ages 2 to 5, as well as data from 96-week interim analyses of two open-label extension studies of ALYFTREK in children 6 to 11 years and people 12 years and older demonstrating the long-term safety and efficacy profile of the medicine. The data, presented at the European Cystic Fibrosis Conference, show children ages 2 to 5 with vanzacaftor/tezacaftor/deutivacaftor-responsive genotypes including those who are homozygous for the F508del mutation (F/F) and those who have F508del/minimal function mutations (F/MF)on ALYFTREK had further improvement in CFTR function from a TRIKAFTA ® baseline as measured by sweat chloride (SwCl), with 65% having achieved SwCl <30 mmol/L after treatment with ALYFTREK. Vertex also presented Phase 3 data of children ages 1 to <2 with TRIKAF
Owkin to Build AI Agents as Part of a Multi-Year K Pro Collaboration with Sanofi5.6.2026 14:00:00 EEST | Press release
Owkin, the agentic AI company pioneering Biological Artificial Superintelligence to transform drug discovery and development, today announced a multi-year collaboration with Sanofi to co-develop next-generation biopharma agents, to be backed by a five-year license for K Pro, Owkin’s AI Scientist. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260605704506/en/ K Pro, Owkin's AI scientist for biology, powered by multimodal patient data for smarter biopharma decision making. Owkin and Sanofi have collaborated since 2021 through a €90 million strategic partnership focused on target identification in oncology and patient subgrouping. The collaboration was later expanded to include drug positioning for Sanofi’s immunology pipeline. This new collaboration represents the next evolution in the partnership. During the five-year collaboration, Owkin will lead the end-to-end development of novel AI-driven biopharma agents purpose-built
DFNS Rebrands as the Core Banking Platform for Digital Assets5.6.2026 13:41:00 EEST | Press release
DFNS today announced a rebrand, marking its evolution from a wallet infrastructure to the first core banking platform for digital assets. The company is introducing a new logo, website, and market position as fintechs and institutions move their products and operations onchain. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260603859127/en/ Banks, fintechs, asset managers, trading firms, payment providers, market infrastructures, and clearing houses have stopped asking how to "add crypto." They're asking how to run financial products, controls, workflows, and client services on blockchain rails, with the reliability expected of core infrastructure. Some are going further still, exploring whether the blockchain can serve as the ledger itself, where an account is an onchain object rather than a row in a database. Where IBANs, virtual accounts, and blockchain wallets converge into one governed financial account. “DFNS was built
Compass Pathways Announces New Employee Inducement Grants Under Nasdaq Listing Rule 5635(c)(4)5.6.2026 13:30:00 EEST | Press release
Compass Pathways plc (Nasdaq: CMPS), a biotechnology company dedicated to accelerating patient access to evidence-based innovation in mental health, announced today that Compass granted equity awards under the Compass Pathways plc 2026 Inducement Plan to seventeen newly hired non-executive employees. The equity awards were granted on June 1, 2026 and consisted of options to purchase an aggregate of 157,000 shares and restricted share units or, in the case of employees in the United Kingdom nominal cost options, covering an aggregate of 74,700 shares. The options have an exercise price per share equal to $14.19, the closing price of the Company’s American Depositary Shares on the Nasdaq Global Select Market on the grant date, and will vest over a four-year period with 25% vesting on the first anniversary of the date of the grant and the remaining 75% vesting in equal monthly installments over the three-year period thereafter, subject to each employee’s continued employment. The restrict
Renewable Electricity, Soft Wheat Flour From Regenerative Agriculture, Initiatives to Support Local Communities: Barilla Shares These and Other Projects in “Stories of Sustainability.”5.6.2026 11:00:00 EEST | Press release
A slimmer Tagliatelle pack that saves 150 tons of cardboard and cuts transport-related CO₂ emissions by 20%1; ready-made sauce jars made with around 65% recycled glass; the progressive scaling of regenerative agriculture practices across Barilla’s value chain and initiatives supporting inclusion and equal opportunities across the Group’s production sites and communities. These are just some of the “sustainability” stories the Barilla Group is sharing on World Environment Day with the publication of its 2025 Sustainability Report. The report comes just after Barilla was named the world’s most reputable company in the food sector for the third year running and, for the first time, ranked among the global top 10 in the Global RepTrak 100 2026. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260603162436/en/ “The future of the planet will increasingly depend on our ability to spread culture and education,” says Paolo Barilla, Vic
In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.
Visit our pressroom