Pre-tax income grew 11% compared to the same quarter a year earlier, to US$390 million, with net income also increasing 11% year-on-year to US$258 million.
Basic earnings per share for the third quarter were 2.16 US cents or 16.90 HK cents.
“Last quarter, despite the geopolitical uncertainties and industry-wide supply shortages, we delivered a record-setting performance with geographical balance, operational excellence, and solid strategy execution. Both group revenue and pre-tax income reached all-time highs,” said Yang Yuanqing, Lenovo Chairman and CEO.
“These core competencies not only enable us to seize the opportunities of technology transformation and drive sustainable growth, but also help us address the challenges we face today.”
Lenovo said the last quarter has presented multiple industry-wide business challenges including ongoing “geo-political uncertainties, component supply shortages and more recently the global Novel coronavirus health situation”.
“As relates to coronavirus, the business priority continues to be ensuring the health and welfare of the Lenovo workforce, continuity of manufacturing and rebuilding capacity, and assisting those working to contain the outbreak.
“Like the rest of the industry, Lenovo is inevitably facing some short-term constraints and delays as the supply chain is ramped back up after the extended Chinese New Year factory closures.
“As a result, Lenovo will leverage its geographical balance, operational excellence and strength in managing complex supply chains across a global manufacturing footprint, and solid strategy execution in order to weather the challenges.”
In its business group overview Lenovo reported that:
- The Intelligent Devices Group (IDG) continues to lead the company’s strong performance. The PC and Smart Devices Group (PCSD), one of the two IDG business units, set all-time records for revenue at US$11.1 billion, pre-tax income of US$684 million, and a PTI margin of 6.2%.
- DG’s second business unit, the Mobile Business Group (MBG), posted its fifth consecutive quarter of profitability. In the company’s stronghold of Latin America Lenovo’s volume outgrew the market by 19 points, while improving pre-tax income margin to to 5.8%. Going forward, the mobile business will continue to strengthen profitability while driving growth in new markets.
- The Data Center Group (DCG) saw server shipments grow by 18% year-on-year. While Data Center group revenue remained flat year-on-year due to sharp component price reductions that decreased average system prices, profitability continued to improve. Non-hyperscale had its highest revenue in four years and grew nearly 16%, with the revenue from the China market alone up 46% year-on-year.