Lenovo posts strong quarterly financial results

Chinese tech titan Lenovo Group Ltd on Wednesday announced record fiscal first quarter results, as the company seized opportunities from accelerated digitalization, intelligent transformation and IT upgrades in devices, infrastructure and applications around the world.

Lenovo said its pre-tax income almost doubled to $650 million in the quarter ending on June 30, up 96 percent year-on-year. Its net income margin reached 2.8 percent, the highest in many years, and its revenue continued growth to $16.9 billion, up 27 percent year-on-year.

Looking ahead, the company sees continued opportunities for sustainable growth and profitability improvements across its business, in areas such as vertical solutions, infrastructure solutions, premium personal computers and adjacent non-PC devices such as tablets, smartphones, embedded computing and other smart devices.

The accelerated digital and intelligent transformation has created significant market opportunities globally, Yang Yuanqing, chairman and CEO of Lenovo, said. "Lenovo is successfully seizing these as we transform from a device company to a services and solutions provider. The proof is in our performance - this quarter alone we've doubled profitability year-on-year while net income margin reached the highest in many years."

"Going forward, we will continue to increase research and development investment, aiming to double it over the next three years. We will further improve our operational excellence and we remain committed to green innovation and corporate citizenship to achieve long-term sustainable profitability increases," Yang said.

Lenovo recently climbed 65 places to be ranked 159 on the Fortune Global 500 list, an all-time high ranking.

As the world's largest PC maker, in the quarter ending in June, Lenovo posted record profit in its intelligent devices group.

Lenovo said the pandemic has changed how people live and work, with PCs returning to the center of digital lives. The PC refreshment cycle has shortened, the penetration rate has increased and total PC demand until 2025 will at least remain at current levels, with commercial demand rebounding quickly.

Meanwhile, the internet of things market is expected to surge at a compound annual growth rate of 11 percent through 2025. And new opportunities in non-PC businesses are growing rapidly, Lenovo said, adding that it will leverage its broad customer base to cross sell non-PC products to drive sustainable profitability increases.