Revenue increased by 3 percent to $10.7 billion, profit before tax went down 80 percent to $52 million and net profit fell to $102 million from $211 million from 2014.
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Following a disappointing fiscal first quarter this year, Chinese PC and mobile device maker Lenovo said it would cut 10 percent of its non-manufacturing positions as part of a $650 million cost-cutting program – affecting 3,200 jobs in total.
He says the company will also focus and reposition its enterprise business “to attack the most relevant and attractive market segments, while increasing overall speed and cost-competitiveness” and accelerate its drive for 30% share in the PC market by taking advantage of consolidation and becoming more efficient. Chime in here, and we’ll share the results.
Lenovo’s Hong Kong-traded shares have lost more than a fifth in the past year. Lenovo’s goal is to achieve 30 percent worldwide PC market share in three years.
In divisional terms, its mobile group will have fewer products and will be relying on its Motorola arm for the smartphones; the company is slated to spend $300 million clearing out its smartphone inventory. Motorola contributed $1.2 billion to Lenovo’s MBG revenues.
Motorola’s contribution to Lenovo’s smartphone shipments stood at 5.9 million units, a 31 percent decline year-over-year. In tablets, Lenovo saw shipments rise 3.8% to 2.5 million slates. The ThinkServer brand that targets small and medium sized enterprises increased over 40 percent. The company had previously said it expected to reach $5 billion of annual sales within a year.
Lenovo mobile phone revenue rose 33 percent to $2.1 billion-due to the inclusion of revenue from Motorola.
Wong Wai-ming, Lenovo’s chief financial officer, said the recent devaluation of the yuan would have no significant impact on Lenovo’s operations.
But even with the cost cutting, Lenovo is confident the restructuring will lead to robust smartphone growth over time. In Enterprise, the EMEA team is attacking more opportunities with an integrated team.
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With over $30B+ in sales, Lenovo is the fastest growing major PC maker. Operating margin was negative 4 percent, weighed down by losses from Brazil and Motorola. In Enterprise, the company is poised to capture new opportunities in the future.
