Lenovo returns to profit amid lingering weakness in mobile, data-centre businesses

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Lenovo swung back to a profit in the financial year to March in what the company acknowledges is a transformational period. A prototype virtual-reality headset is displayed at the Lenovo booth during CES unveiled on in January. Photo: AP

Published: 4:00pm, 25 May 2017Updated: 10:30pm, 25 May 2017

Lenovo Group plans to step up the transformation at its underperforming mobile and data-centre businesses after the computer giant swung back in the black in the year to March, rebounding from a loss in the same period last year.

“The group will execute its strategy diligently to drive sustainable profitable growth over time,” chairman and chief executive Yang Yuanqing said in a press conference on Thursday after the market closed.

Shares of Lenovo opened at HK$4.87 but quickly surged in the afternoon after the company reported its results for the financial year to March. They rose 3.7 per cent to close at a four-week high of HK$5.05.

The company, which has operations in more than 160 countries, posted a net profit of US$535 million, compared with a US$128 million loss the previous year.

Revenue was down 4 per cent to about US$43 billion due to lingering weakness at its mobile and data-centre businesses.

Yang Yuanqing says Lenovo’s revenue resumed growth in the fourth quarter after five quarters of decline. Photo: Nora Tam

Its net profit missed the US$604 million consensus estimate from a Bloomberg survey of analysts while revenue was in line with the market estimate of US$43.1 billion.

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