Lenovo posts Q2 FY2016 earnings

PC and tablet markets still remain down

On Friday, Lenovo reported its revenue earnings for the third quarter of 2016, up 12 percent over the previous quarter and down 8 percent year-over-year as market conditions continue to remain challenging.

The company’s pre-tax income was $ 168 million while net income was $ 157 million. This is in contrast to an $ 842 million pre-tax loss in the second quarter of last year and a $ 714 million net loss during the same quarter.

Consolidated revenues were $ 11.2 billion, or an eight percent decrease year-over-year, yet a 12 percent increase over the first fiscal quarter ending June 30th.

21.5 percent global PC market share

In the third quarter, Lenovo shipped 14.5 million notebooks, desktops and tablets and generated a 21.5 percent global market share with $ 7.8 billion generated in revenues. The company also shipped 14 million smartphones under the Lenovo and Motorola brands, and earned $ 2 billion in revenue from this segment. For servers, storage equipment, software and IT services it earned $ 1.1 billion in revenues.

While both PC and tablet markets are down, the company has shown some modest growth in smartphones and servers. “Market conditions remained challenging but we delivered solid results,” said Yang Yuanqing, Lenovo Chairman and CEO. “Our PCSD business maintained leadership and strong profitability, our Mobile business had good quarter-to-quarter volume growth and margin improvement, and our Data Center business is actively addressing its challenges.”

Lenovo adds three top executives in the quarter

Meanwhile, the company added three new top leadership positions to strengthen its presence as a device and cloud-based company. Kirk Skaugen, former Intel Senior VP and General Manager of the Client Computing Group (CCG), will become the Executive VP and President of Lenovo’s Data Center Group (DCG). Laura Quatela, former executive and president at Alcatel-Lucent and Eastman Kodak, will join as Chief Legal Officer, and Dr. Yong Rui, former Deputy Managing Director from Microsoft Research Asia, will join as the company’s Chief Technology Officer.