“The means we delivered our commitments to turn this business around within four to six quarters after our acquisition of Motorola”, Yuanqing said.
Advertisement
The cost cuts helped Lenovo increase net income 19pc to $300m in the third quarter.
The bright spot for phones was outside of China, where Lenovo witnessed an overall 15% growth rate year-on-year, doing particularly well in emerging markets such as India where smartphone shipments were up 206%. The business it acquired from IBM supplies servers to the massive datacenters built by Internet giants from Alibaba Group Holding Ltd.to Google Inc. that host mobile applications and corporate information technology.
It remains to be seen if any PC or mobile growth is possible across the market until economic conditions improve worldwide.
“[Lenovo’s] fiscal third quarter profitability was above expectations, despite a slight shortfall in revenue given PC shipments were below consensus”, Jefferies equity analyst Ken Hui said in a report. Those efforts translated into $3.2 billion in quarterly sales, two months of which included Motorola’s results.
HONG KONG – (BUSINESS WIRE) – February 2, 2016 – Lenovo Group (HKSE: 0992) (PINK SHEETS: LNVGY) today announced results for its third fiscal quarter ended December 31, 2015. Lenovo aims to achieve $5 billion from the Enterprise business in 2015-16 fiscal year.
In the Enterprise Business Group, or EBG, which includes servers, storage, software and services sold under both the ThinkServer and System x brands, sales were US$1.3 billion, up 8 percent year-over-year and 12 percent quarter-to-quarter.
Lenovo noted that the strategic “realignment” it kicked off last August to make cost savings was on track to ensure $1.35 billion (around £940 million, AU$1.9 billion) in savings across the full year, giving it a “cost structure that is significantly lower than its peers”.
In addition, Lenovo saw a 12 percent sales decline in the PC market, its biggest profit source.
Neil Mawston, the executive director at Strategy Analytics, said Lenovo “may find it harder to return to the top five ranking in mainland China because it is still battling with the Motorola integration”.
Advertisement
“Obviously there would be an impact, but we have very viable solutions”, said Gerry Smith, chief operating officer for Lenovo’s personal computer and enterprise business groups.
