China's Lenovo Group Posts USD153 Mln Net Profit for Second Quarter, Buys Fujitsu Subsidiary to Claim Top Spot in Global PC Market
Liao Shumin
/SOURCE : Yicai
China's Lenovo Group Posts USD153 Mln Net Profit for Second Quarter, Buys Fujitsu Subsidiary to Claim Top Spot in Global PC Market

(Yicai Global) Nov. 2 -- Lenovo Group Limited [HKG:0992] has posted a net profit of USD153 million for the second quarter of the year, China's computer giant told the Hong Kong Exchanges and Clearing Limited in a filing today.

The net profit attributable to shareholders in the first half of the fiscal year was USD66.8 million, and the operating revenue reached USD21.77 billion. In August, Lenovo Group recorded a net loss of USD72 million for the first quarter of 2017, with three main businesses slumping across the board. Following that disclosure, Lenovo's shares had dropped for three consecutive trading days, hitting a record low of the year. 

"In the second fiscal quarter, the personal computer business achieved a faster growth than that of the market, while maintaining the leading profit level in the industry. Through initiatives such as raising sales capacity, setting up a new global sales channel, and launching competitive new products, the adjustment of data center business has gradually achieved results. The mobile services continue to move forward as planned, reversing downward business trend and realizing a growth faster than that of the market in most markets," cs.com.cn quoted the Lenovo Group chairman and CEO, Yang Yuanqing, as saying. 

Financial data show that in the second fiscal quarter, Lenovo has a turnover of USD11.8 billion, which is 5 percent higher than a year earlier, and it has achieved a pretax profit of USD35 million, which contrasts sharply with a loss of USD72 million in the first quarter. This means that Lenovo has realized more than USD100 million profit reversal in one quarter, turning its operating losses into profit. 

The USD35 million pretax profit plus tax credit led to a second fiscal quarter net profit of USD153 million, the company's financial report shows.

Lenovo also announced a formal agreement with Japanese firm Fujitsu on the same day to purchase 51 percent stakes of its wholly-owned subsidiary FCCL (Fujitsu Client Computing Limited) for a transaction price of JPY17.85 billion (USD157 million). FCCL is mainly engaged in the development, manufacturing, distribution and sales of desktop personal computers, notebooks and tablets as well as other related products. 

This move is expected to put Lenovo back to the driver's seat of world's PC market, industry analysts comment. As the IDC data indicate, as of the third quarter of 2017, Lenovo PC has had a global market share of 21.6 percent. With the addition of 4 percent share from Fujitsu subsidiary, the company will hold a combined market share of over 25 percent, which ranks it number one in the global PC sales market.

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Keywords: Lenovo Group , Financial Result , Fujitsu Client Computing Limited