MORRISVILLE – Lenovo’s profits surged 31% higher than a year ago as sales soared past analysts’ expectations, the COVID-19 pandemic driving up demand for its “bread and butter” business – personal computers.
The global tech conglomerate, which operates dual headquarters in Morrisville and Beijing, reported early Thursday sales of $12.35 billion for its most recent quarter. That topped the expectations of $12.21 billion from analysts at FactSet.
Net income, meanwhile, jumped to $213 million, nearly doubling analysts’ estimates. Earnings came in at 1.8 cents per share.
Chair and CEO Yang Yuanqing saw multiple reasons for the strong quarter.
“Our outstanding performance last quarter proves that Lenovo has quickly regained momentum from the impact of the pandemic and is capturing the new opportunities emerging from remote working, education and accelerated digitalization,” Yang said in a statement.
Back in May, Lenovo noted the growth in PC demand due to the pandemic.
“The clear trend we see in that- usually at home, you have a one or two PC, so it’s one to two PC per family at least in mature market. It’s really becoming one PC per person,” said Lenovo President Gianfranco Lanci.
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Added Yang in Thursday’s earnings announcement: “While the world continues to face challenges, Lenovo is focused on delivering sustainable growth through our core businesses as well as the new services and solutions opportunities presented by our service-led intelligent transformation.”
Not all the news has been good recently. Lenovo made a round of layoffs and cut other costs in late May.
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PC sales, which make up the vast majority of Lenovo’s revenues, climbed 10%. Lenovo is the world’s top PC seller.
Lenovo also improved its proft margins on PCs, sayint it had set a “new record” for the firm at 6.3%.
Demand by consumers drop up revenes 45% year over year.
The company also noted that “volume in high-growth and premium categories such as Gaming, Thin & Light, Visuals, and Chromebooks all continued to grow at high double-digits.”
Revenues did decline for its Mobile Business Group.
The Data Center Group, which is based in the Triangle, reported a sales increase of “almost 20%” to $1.6 billion. Helping lead the growth was a 30% year-over-year increase in its cloud efforts.
Lenovo’s “smart” business efforts also showed growth, the “Intelligent Transformation” efforts producing more than $1 billion.
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August 13, 2020 at 06:21PM
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Lenovo profits, revenues surge beyond expectations with pandemic driving sales - WRAL Tech Wire
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