Lenovo profit drops 36 percent in fourth quarter
The PC maker recorded a net income of $100 million, beating analysts' expectations.
Lenovo Group reported Thursday that its fourth-quarter net profit declined 36 percent from a year ago, beating analysts' expectations as the Chinese PC maker adjusts to two major acquisitions.
Lenovo recorded a net income of $100 million for the three months ended March 31, a 36.7 percent decline from $158 million for the year-ago period, the company announced. Average analyst estimates predicted a net income of $91.6 million, according to Bloomberg.
The company's revenue for the quarter climbed 21 percent to $11.3 billion. For the full year, Lenovo said it had record revenue of $46.3 billion, up 20 percent year-over-year.
It was the first full quarter to include the acquisitions of both Motorola Mobility and IBM's x86 server business, both of which closed in October.
Lenovo's mobile unit, which includes products from its acquisition of Motorola Mobility, shipped 18.7 million smartphones for the quarter and a company record of 76 million for the full year. Revenue for the division, which also includes Android tablets and smart TVs, was $2.8 billion for the quarter.
The company expects the Motorola unit to return to profitability in the next four to six quarters, thanks largely to its re-entry in the China market. Lenovo, already the No. 2 smartphone maker in China, is positioning Motorola to compete with high-end smartphone makers Apple and Samsung.
Lenovo's PC unit, which typically accounts for most of the company's revenue, shipped 13.3 million PCs in the quarter, up 2.7 percent year-over-year. The company said its share of the global PC market shrank slightly to 19.5 percent from 20 percent in the previous quarter. The unit, which also produces Windows tablets, recorded revenue of $7.2 billion, an increase of 11 percent year-over-year.
"In view of the opportunities and challenges of the new Internet+ era, we are ready to transform ourselves from making mostly hardware to a combination of hardware and software services," Lenovo Chairman and CEO Yang Yuanqing said in a statement. "This will spur a new wave of growth for Lenovo in the coming years."