updated 10:02 pm EST, Wed February 12, 2014
Company posts gains in desktops, laptops despite industry contraction
The Lenovo Group today announced results for its third fiscal quarter that ended December 31. Quarterly revenue was $10.8 billion, a 15 percent increase year-over-year, passing the $10 billion milestone for the first time ever. Third quarter profit grew, with pre-tax income increasing 30 percent year-over-year to $321 million, while earnings also grew 30 percent year-over-year to $265 million. Lenovo shipped 32.6 million devices in the quarter, or nearly five devices every second.
Lenovo's third quarter mix of sales from its Mobile Internet and Digital Home division -- which develops "PC Plus" products such as smartphones, tablets and smart TVs -- was 16 percent of total revenues, up from 11 percent one year ago and seven percent two years ago, with steadily-improving profitability.
Lenovo's PC shipments for the third fiscal quarter was 15.3 million units. This was also the 19th quarter in a row that Lenovo outperformed the industry as a whole.
Lenovo's combined shipments of smartphones and tablets -- 17.3 million devices -- surpassed the 15.3 million PCs it sold. In tablets, Lenovo had a record high of 3.4 million tablet shipments, up over 300 percent year-over-year.
During the third fiscal quarter, Lenovo's laptop computers were the largest contributor to the company's revenue worldwide, generating 50 percent of Lenovo's total revenue. Across the industry, laptop shipments were down 6.3 percent year-over-year. Lenovo's desktop PC shipments grew 9.1 percent worldwide year-over-year during the third fiscal quarter, compared to an overall industry decrease of about three percent.
The Company's gross profit for the third fiscal quarter increased 15 percent year-over-year to $1.36 billion, with gross margin at 12.6 percent. Operating profit for the quarter grew 37 percent year-over-year to $334 million. Basic earnings per share for the third fiscal quarter was 2.56 cents.