Lenovo Continues to Gain Momentum in Q1 FY 2017/18

Data Center business introduced its most comprehensive new product portfolio ever, including ThinkSystem and ThinkAgile lines

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Behind the strength of its three-wave strategy, Lenovo’s business transformation continued to gain traction during the first quarter, delivering solid profitability in its core PC and smart devices business, and revenue and profit improvements in targeted growth areas, including the data center and mobile businesses.

Fueled by new investments in people and products, Lenovo’s Data Center Group (DCG) introduced the most comprehensive product lineup in its history, with the new ThinkSystem and ThinkAgile portfolio, and continued to build out its end-to-end sales organization.

Similarly, Lenovo’s Mobile Business Group launched significant new products led by the Moto Z2 Force, available now on all major U.S. carriers, and ramped up its branding efforts worldwide.

“In the first quarter this fiscal year, we had stable performance as we executed our 3-wave strategy with commitment. We maintained our industry leading profitability in PC, built the foundation in mobile and data center, and further invested in ‘Device + Cloud’ and ‘Infrastructure + Cloud’ powered by Artificial Intelligence,” said Yang Yuanqing, Lenovo chairman and CEO.

“We have made solid progress on every front of our strategy. Particularly MBG continued to improve, and is on track to breakeven by second half of this fiscal year. DCG gained good momentum as well. As the two new growth engines gain speed, we believe the sustainable results will soon follow.”

For its first fiscal quarter ended June 30, 2017, Lenovo’s quarterly revenue was US$10 billion, flat year-over-year, but an increase quarter-to-quarter of 4.5 percent. First quarter pre-tax loss was US$69 million, with a net loss of US$72 million.

Operating profit was up US$110 million quarter-to-quarter. The Company’s gross profit for the first fiscal quarter decreased 11 percent year-over-year to US$1.4 billion, yet remained flat quarter-to-quarter, with gross margin at 13.6 percent. Basic loss per share for the quarter was 0.66 US cents, or 5.15 HK cents.

Lenovo introduced its three-wave strategy, namely balancing PCSD growth and profit, accelerating the DCG and MBG growth engines, and investing in non-hardware areas, to both meet today’s market dynamics while positioning the company for longer-term profitable growth. Lenovo is investing in core technology and next-generation platforms that will help customers move towards a smart internet era where all smart devices will be connected to the cloud and powered by Artificial Intelligence (AI).

While Lenovo is focused on new technologies with our ‘Device + Cloud strategy’, the Lenovo Capital and Investment Group (LCIG), the company’s provider of IoT solutions, reached a first quarter milestone of over three million users on its global API platform.

In addition, as Lenovo continued to expand its ecosystem, LenovoID (a unique identification of directly reachable users across Lenovo devices) reached 225 million users in the first quarter. The progress Lenovo is making in its non-hardware businesses, such as software, services, and big data, is already gaining significant traction and winning new customers.


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lenovo Data Center business ThinkSystem ThinkAgile cloud

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