Lenovo sees profit growth sag in fiscal Q2

Lenovo became the world's top PC vendor during the quarter, according to research firm Gartner

Lenovo's net profit for the fiscal second quarter increased by only 13 per cent year-over-year, marking a shift from the high profit growth the company has previously seen.

For the fiscal second quarter ending on Sept. 30, Lenovo's net profit reached $US162 million. Revenue for the quarter was a record $US8.7 billion, a year-over-year increase of 11 per cent.

In its fiscal first quarter, Lenovo reported 30 percent year-on-year growth in net profit. Last year, the company saw profit growth almost doubling year-over-year in some quarters.

Lenovo has consistently reported solid growth in its product shipments despite slowing growth in the PC industry, and competition from Apple's iPad which has cut into sales of laptops.

The Chinese company increased PC shipments in the fiscal second quarter, and was named the world's largest PC vendor by research firm Gartner. Research firm IDC, however, still ranks rival HP as the top PC vendor with a slight lead ahead of Lenovo.

During the quarter, Lenovo reported that its PC shipments grew year-over year by 10.3 per cent. Lenovo has credited the growth to its "protect and attack" strategy, with the company maintaining its dominant position in China's PC market, while expanding into new emerging markets. In China alone, the company's revenue reached $3.9 billion, accounting for 44 per cent of Lenovo's global sales.

The company also saw growth in its Mobile Internet Digital Home group, which sells smartphones. The business group saw revenue reach $US718 million in the quarter, up 155 per cent from the same quarter last year. In China, Lenovo's smartphone shipments reached second place, behind Samsung, according to research firm Canalys.

Lenovo announced during the quarter it would begin selling smartphones in Indonesia, Philippines, Vietnam and India. Microsoft's Windows 8, which was formally launched only two weeks ago, could also help grow PC sales.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags business issuesconsumer electronicssmartphoneshardware systemsdesktop pcsLenovolaptopsfinancial results

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?