Lenovo earnings beat estimates as acquisitions boost revenue
By Bloomberg
Lenovo Group Ltd. profit beat analysts’ estimates after widening its lead as the world’s biggest PC maker and as the acquisition of Motorola Mobility boosted the smartphone business.
Net income for the three months to March 31 fell 37 percent to $100 million, the company said in a statement today. That compares with the $91.6 million average of analyst estimates compiled by Bloomberg.
Lenovo sales climbed in the quarter and the company maintained its status as the biggest smartphone maker after Samsung Electronics Co. and Apple Inc. Gianfranco Lanci, who took the role of president last month, is tasked with driving the enterprise business. The company took over one of IBM’s server units last year as it seeks growth beyond the ebbing PC market.
“While we believe Lenovo can execute its PC market share expansion and Motorola turnaround plans, we think the potential upside in earnings will come from further cost reduction for the remaining quarters in FY16,” Arthur Hsieh, an analyst at UBS AG, wrote in a report.
Lenovo climbed 0.9 percent to HK$13.48 at the midday trading break in Hong Kong prior to the earnings announcement. The shares have added 32 percent this year and outpaced a 17 percent gain in the benchmark Hang Seng index.
Sales for the period climbed 21 percent to $11.3 billion, missing the $12.1 billion average of analyst estimates.