Lenovo hits $12.5B in revenue, marking eighth year of growth

Lenovo has announced it achieved revenue growth in the first quarter of 2019, with the group reaching US$12.5 billion. According to the company this is the eighth consecutive year of growth for the business.

Lenovo states that the growth is a result of customer focus and its intelligent transformation strategy.

The company has announced that pre-tax income more than doubled year-on-year, growing by US$127 million to reach US$240 million, and net income also more than doubled, up US$85 million to US$162 million.

Basic earnings per share for the first quarter were 1.37 US cents or 10.74 HK cents.

According to the company, the strong results are led by the Intelligent Devices Group (IDG). The PC and Smart Devices Group (PCSD), one of its two business units, continued double-digit (12%) revenue growth while achieving its highest profit ever in a fiscal first quarter, and further improving industry leading profitability. Pre-tax income was US$524 million, up US$98 million.

Americas and Asia Pacific achieved 20% and 40% year-on-year revenue growth respectively and all four geographies (Americas, Asia Pacific, China, EMEA) each delivered over US$2 billion in revenue.

In PCs, volume outgrew the market by more than 13 points, and the group hit an all-time record PC market share of 24.9%.

Lenovo states it is focused on high growth and premium categories including Workstation, Thin and Light, Visuals, Gaming PCs and Chromebook.

Looking forward, the PC and Smart Device group will continue to drive premium to market growth and profitability by focusing on premium segments as well as innovating in Smart IoT, commercial Smart IoT and developing new devices for homes and offices, the company states.

IDGs second business unit, the Mobile Business Group (MBG), delivered a profitable quarter and improved pre-tax income by US$100 million for the 4th consecutive quarter.

The Data Center Group (DCG) continued to improve profitability year-on-year for the eighth consecutive quarter, Lenovo states.

Storage revenue grew more than 80% year-on-year and Software Defined Infrastructure (SDI) continued to grow at a double-digit rate year-on-year.

Overall revenue for the company declined, and Lenovo states this is due to a small number of large cloud customers reducing their purchasing after rapid infrastructure growth over the past year and a lower average unit revenue due to declining component prices.

Lenovo says the group will continue to expand as a full stack Data Center player, focusing on SDI, storage, networking, HPC, AI, IoT, service and solution led sales, as well as in-house design and manufacturing capability for Hyperscale.

In addition, the business will seek to improve routes-to-market and operational excellence.

Lenovo chairman and CEO Yang Yuanqing says, "This fiscal year kicked off to an excellent start. Once again, this quarter's strong results provided solid evidence that Lenovo's Intelligent Transformation is enabling the company to drive sustainable, profitable growth in today's dynamic and changing world."

"Our persistent execution and operational efficiency allows us to bring our vision to life and deliver smarter technology for all," he says.

Lenovo currently sits across 180 markets globally.