World’s largest PC maker Lenovo Group Ltd. said its earnings escalated to 30% to $265m (or £159m) in its 3rd quarter net profit on higher sales of laptops and mobile devices. The Chinese company’s revenues bounced by 15% to $10.8 billion, which is led by China’s sales. However, Lenovo warned its future profit would be negatively impacted by its recent acquisition of IBM’s low-tech server business and Google’s Motorola Mobility.
Lenovo paid more than $5 billion – or almost half of Lenovo’s market value – to purchase both businesses last month. “This acquisition is good for our shareholders for the long term but it could have a certain negative impact (on earnings) in the short term,” said Lenovo Chief Executive Yang Yuanqing. Investors have wondered the firm’s move, given both Motorola’s handset-maker and IBM’s server business are generating loss at present.
Lenovo in a conference call noted it would take up to five quarters – or more than a year – to revive Motorola, which it bought from Google for $2.9 billion.
‘Pillars of growth’
But the world’s largest PC maker emphasized that the acquisitions are all part of a longer-term game plan to go away from its dependence on PC sales and enlarge its proximity in the server and smartphone sectors.
“We are confident we will maintain this momentum in our existing businesses. The Motorola and IBM server acquisitions that we just announced are a perfect fit with our PC Plus strategy,” Yuanqing added. Lenovo said it delivered 32.6 million devices in the 3rd quarter or almost five devices every second.
Shares of Lenovo listed more than 1% lower in Hong Kong after the publication of the results on Thursday.
The material has been provided by InstaForex Company – www.instaforex.com
World’s largest PC maker Lenovo Group Ltd. said its earnings escalated to 30% to $265m (or £159m) in its 3rd quarter net profit on higher sales of laptops and mobile devices. The Chinese company’s revenues bounced by 15% to $10.8 billion, which is led by China’s sales. However, Lenovo warned its future profit would be negatively impacted by its recent acquisition of IBM’s low-tech server business and Google’s Motorola Mobility.
Lenovo paid more than $5 billion – or almost half of Lenovo’s market value – to purchase both businesses last month. “This acquisition is good for our shareholders for the long term but it could have a certain negative impact (on earnings) in the short term,” said Lenovo Chief Executive Yang Yuanqing. Investors have wondered the firm’s move, given both Motorola’s handset-maker and IBM’s server business are generating loss at present.
Lenovo in a conference call noted it would take up to five quarters – or more than a year – to revive Motorola, which it bought from Google for $2.9 billion.
‘Pillars of growth’
But the world’s largest PC maker emphasized that the acquisitions are all part of a longer-term game plan to go away from its dependence on PC sales and enlarge its proximity in the server and smartphone sectors.
“We are confident we will maintain this momentum in our existing businesses. The Motorola and IBM server acquisitions that we just announced are a perfect fit with our PC Plus strategy,” Yuanqing added. Lenovo said it delivered 32.6 million devices in the 3rd quarter or almost five devices every second.
Shares of Lenovo listed more than 1% lower in Hong Kong after the publication of the results on Thursday.
The material has been provided by InstaForex Company – www.instaforex.com
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