Lenovo has announced financial results for Q3, 2014 ended December 31, 2014. The company reported $14.1 billion revenue, a 31 percent increase year-over-year.
Lenovo showed a strong PC business which account for 65 percent of the company’s revenue, while mobile delivers 24 percent and enterprise contributes 9 percent. Just a year ago, PCs accounted for 81 percent of Lenovo’s business. The company’s gross profit for the third fiscal quarter increased 54 percent year-over-year to $2.1 billion, with gross margin at 14.9 percent. Operating profit for the quarter decreased 3 percent year-over-year to $325 million and Net cash reserves as of December 31, 2014, totaled $1.3 billion.
“This quarter, we are at the starting line of a new race, but the results show that we have the right strategy, we made the right acquisitions and we executed well globally, so I am confident we are ready to win. Our core PC business maintained its leading position and further improved profitability. The two newly acquired businesses are achieving great momentum in their first quarter of integration. They are definitely becoming our growth engines. Motorola is already a global strength: for the first time it sold more than 10 million units in the quarter and it is now re-entering the China market. Meanwhile, we have a strong start with the System x integration, even while we further refine and develop it, leveraging Lenovo’s operational excellence and efficiency to be even more competitive. I remain fully confident we will meet all of our financial commitments this year, and also that we are on the right track to win in the long term.”
said Yuanqing Yang, chairman and CEO of Lenovo.
Sales of Lenovo PC division which includes PCs and Windows tablets were $9.2 billion with a record high pre-tax income (PTI) of $494 million. The company shipped 16 million PCs in the quarter, up 4.9 percent year-over-year, for a total market share of 20 percent. Lenovo sold its 100 millionth ThinkPad laptop PC, marking a historic milestone.
In the Mobile Business Group or MBG which includes products from the Motorola investment, Lenovo-branded mobile phone business, Android tablets and TVs, Lenovo sales were $3.4 billion generating PTI of negative $89 million. Motorola shipped more than 10 million units, up 118 percent year-over-year, adding $1.9 billion to MBG’s revenues. Motorola has also re-entered China with three smartphones and is on track to be profitable within 4-6 quarters of close.
Lenovo became the third largest smartphone vendor thanks to combined shipments of Motorola and Lenovo-branded devices. The duo together had nearly 6.6 percent market share, up 78 percent year-on-year. Global tablet market share was 4.8 percent, with 3.7 million shipments, up 9 percent year-over-year, powered by the launch of our latest Yoga tablet. Lenovo now drives about 60 percent of its mobile phone volumes outside China, having entered 67 countries in the last two years.