Friday, June 22, 2018
Martin Hennecke

Lenovo Q3 earnings tumble
Lenovo Group (0992), the world's largest personal computer maker, said net profit in the third quarter to December slumped 67 percent, due mainly to supply constraints and a weak macroeconomic environment.

Net earnings were US$98 million (HK$764.4 million), a steep drop from US$300 million from a year earlier. Revenue during the period fell 6 percent to US$12.2 billion.

Despite the third-quarter setback, net profit for the nine months ended last December amounted to US$428 million, a sharp turnaround from a US$308 million loss in the same period a year earlier. However, revenue in the first three quarters fell 6 percent to US$33.5 billion. Basic earning per share in the third quarter were 0.9 US cents, while those for the nine months ended last December were 3.88 US cents.

It said mobile phone shipments in the third quarter fell 26 percent, though achievements were made since the first quarter.

Chairman and chief executive Yang Yuanqing yesterday said shipments were dragged down by component supply constraints and rising costs. "We could have shipped another two million smartphones in the third quarter [if we had sufficient supply]," he said.

Lenovo's situation in the fourth quarter will hardly be any different from the previous three-month period, he said.

He said the mobile unit may post profit by December.

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