Lenovo Announces Q4 Fiscal Year Results

Lenovo Group yesterday announced results for its fourth fiscal quarter and full-year ended March 31, 2016. The results revealed that the group has strengthened its core PC business, enhanced its cost structure and protected its profit, despite facing internal and external challenges that impacted revenue, which was US$9.1 billion, down 19 percent year-over-year, while annual revenue was US$44.9 billion, down 3 percent year-over-year.

At the same time, the largest restructuring program in Lenovo’s history delivered a better cost structure with US$690 million of savings in the 2^nd half of the year, sending 4^th quarter PTI up to 86 percent year-over-year to US$193 million.

Further, annual loss before tax was US$277 million. Fourth quarter net income was up 80 percent year-over-year to US$180 million, while full year net loss was US$128 million, even after US$330 million in non-cash M&A related accounting charges.

Lenovo Chairman and CEO, Yang Yuanging said, “Last quarter, despite challenging economic and industry conditions that hurt our top line, the decisive actions we took mid-year allowed us to protect our profitability. We kept our core PC business strong, continuously improved profitability in enterprise and saw positive momentum in some key smartphone markets.”

“Facing the operational issues in the businesses, we have already taken a number of proactive actions, including making key decisions in organization, leadership, products and channels to get back to growth in mobile, and adopting a new multi-business operating system to unleash the productivity and creativity of each business.

“At the same time, we will integrate our traditional strength in end-user devices with our new capabilities in cloud and infrastructure to attack the balanced Device + Cloud opportunities,” he addded

He stated that even while facing internal and external challenges, and working through major restructuring and reorganization programs, Lenovo still delivered these operational and financial achievements. Yuanging enumerated that, the company among other things, strengthened position as global PC leader with strong profits and record market share, up 1.3 pts to 21 percent.

In addition, it recorded market share in tablets, out growing the market and ranking as third with nearly 11 million units shipped in the year. It saw 73 percent year-over-year annual revenue growth, a 6^th straight quarter of operational profit, and strong China and Emerging Market performance.

Lenovo’s recorded gross profit for the full year was US$6.6 billion, a decrease of 1 percent year-over-year. Fourth quarter gross profit was US$1.5 billion, down 15 percent. Gross margin was 14.8 percent and 16.6 percent for the year and quarter, respectively.

Also, operating loss for the full fiscal year was US$62 million and profit of US$248 million for the quarter, up 95 percent over the fourth quarter of last year. Basic earnings per share in the fourth fiscal quarter was 1.63 US cents, or 12.67 HK cents; basic loss per share was 1.16 US cents, or 9.00 HK cents for the full fiscal year.

Lenovo’s Board of Directors declared a final dividend of 2.64 US cents, or 20.5 HK cents per share for the fiscal year ended March 31, 2016.