Lenovo Group has announced the results for its third fiscal quarter ended Dec. 31, 2015. Quarterly revenue was $12.9 billion, an 8 percent year-over-year decrease, or 2 percent year-over-year in constant currency. Third quarter pre-tax income, excluding non-cash, M&A related accounting charges of $77 million, was $397 million, while reported pre-tax income was $320 million, up 17 percent, exceeding analyst's estimates. Net income was $300 million, up 19 percent, also exceeding analyst's estimates.
The decisive realignment actions that Lenovo announced in August 2015 are on track to realize $1.35 billion in full year run-rate savings. These savings are giving Lenovo a cost structure that is significantly lower than its peers. Combined with its solid execution and innovation pipeline, Lenovo is transforming its business model, processes and organization, positioning itself to maintain a healthy business even in the current environment.
"Last quarter, although we were impacted by the global macro-economic slowdown, currency fluctuations in key markets, and PC market decline, Lenovo still achieved record high profit and delivered on our commitment to turn around the Mobile business," said Yuanqing Yang, chairman and CEO of Lenovo. "Next, in PCs, we will leverage the consolidation trend, commercial PC replacement, and opportunities in innovative product categories to drive growth. In Mobile, we will build scale and efficiency to accelerate our growth in emerging markets, breakthrough in mature markets with innovative products and premium brands, and expand in the open market in China with a stronger product portfolio. And finally, in Enterprise, we will leverage leading technologies and strategic partnerships to drive profitable growth." The company's gross profit for the third fiscal quarter decreased 10 percent year-over-year to $1.9 billion, while gross margin stood at 14.6 percent. - SG
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