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Lenovo posts strong Q4 results

Vendor’s PC shipments soar with notebooks

Yuanqing says with the emergence of multiple devices such as smartphones and tablets, the industry is entering the PC Plus era.
Yuanqing says with the emergence of multiple devices such as smartphones and tablets, the industry is entering the PC Plus era.

PC maker Lenovo has reported strong fourth-quarter and full-year earnings that position it as the fastest growing PC maker among the world's top four vendors for the tenth consecutive quarter.

Strong sales of its notebook and desktop PCs, particularly in North America, were key drivers of growth for the China-headquartered vendor.

Lenovo announced a pre-tax income of $102 million for its fourth fiscal quarter, marking a steep 69% year-over-year jump from the same period last year. Its gross profit also shot up to $806 million, growing 34% year-over-year.

The PC maker said its notebook business grew 41% year-over-year, accounting for $4.2 billion throughout the three-month period and representing a hefty 56% of the company's overall sales. Lenovo's desktop business saw similar growth, with worldwide shipments up 43% compared to the same period last year.

Surprisingly, much of this growth was traced back to North America, rather than Lenovo's own home base in China, where its industry-leading 30% market share has already placed it ahead of its rivals. In North America, Lenovo said its PC shipments were up 26%, in an overall market that was flat year-over-year.

In the emerging markets, of which the Middle East region falls under, Lenovo’s PC shipments far surpassed industry expectations for PC shipments, with the company delivering a 50% year-over-year increase, seven times the overall industry growth rate of 7.4% .

Representing 16% of Lenovo’s overall sales, emerging markets sales jumped 43% year-over-year during Q4 to  total $1.2 billion. Lenovo enjoyed notable market share gains across the entire region, picking up 2.1 share points year-over-year, with a particularly strong showing in India and Russia. The vendor ended the quarter as the number-one PC vendor in India, a first-time ever milestone.

The company didn't disclose numbers around sales of its ThinkPad T430u Ultrabook or its new IdeaCentre A720 all-in-one desktop. However, it did say its ThinkPad and IdeaTab tablets were selling well; overall sales shot up 17.2% year-over-year, making Lenovo the number two largest tablet maker in China and the number four largest world-wide.

The PC giant also said its smartphone shipments grew ten times faster than the overall market in China last quarter, in alignment with a new strategy the company has dubbed its ‘PC Plus era.'

"With the emergence of multiple devices such as smartphones, tablets and smart TV, our industry is entering the PC + era," said Yang Yuanqing, Lenovo chairman and CEO, in the press release. "Lenovo is focused on leading the PC industry, and building upon that leadership in the PC + era."

But mobile devices aren't the only products driving Lenovo into this new "era" of computing. The company announced a new initiative at its annual Accelerate Partner Summit in Las Vegas to expand its server offerings in the low-end enterprise market. It launched its new ThinkServer RD530 and RD630 products as a first step in this direction last week.

For its full-year financial results, Lenovo reported record-breaking numbers. Sales were at an all-time high at $29.6 billion, marking a 37 percent increase over last year, and income jumped 63% to $582 million. With 12.9% global market share, Lenovo held tightly to the number-two seat in a race against HP and Dell for the title of world's biggest PC maker.

Gartner suggested HP was still the reigning champ last quarter with 16%.