Lenovo Group today announced the first half of fiscal year earnings, then Group Chairman and Chief Executive Officer Yang Yuanqing said in an interview with foreign media, he was confident that in the second half of 2018 fiscal year to complete the goal of mobile business transformation.
As the first quarter of the increase in costs and personal computer growth slowed down, Lenovo Group for seven quarters to the first loss. But Yang said he saw a turning point in the quarter, he believes that Lenovo will regain the ascending track.
Lenovo Group in the June quarter of the world's largest PC manufacturers to give the title of Hewlett-Packard, Lenovo's quarterly loss of 72 million US dollars, compared with the same period last year earnings of 173 million US dollars by the profit turn losses.
This is the company's first quarterly loss since September 2015, below analysts' average forecast of $ 5.29 million in profits. After the earnings report, Lenovo shares fell 5% to HK $ 4.52 on Friday morning trading, the lowest point in the stock for the past year.
Executives say the outlook for the remainder of the year is challenging because the shortage of spare parts will lead to rising costs and may force companies to raise prices to protect margins. Lenovo chief operating officer Gianfranco Lanci (Gianfranco Lanci) said in a conference call, most of the parts prices are stabilized, only the memory price is still rising.
He said that the rise in memory prices will continue until at least the end of the year, although the growth rate is lower than the past two quarters, which is caused by the surge in global demand for semiconductors. He also said that the demand for the automotive industry also pushed up the price of the battery.
As consumers turn to mobile devices, PC makers around the world are struggling, but Lenovo's core PC business is declining faster than many rivals.
Lenovo's PC shipments fell 6% in the second quarter, while global PC shipments fell only 3%. Lenovo PC business revenue of 7 billion US dollars, flat year on year.
Industry consultants Canalys analyst Mo Jia (Mo Jia) said: "In general, with the parts prices, short-term increase PC performance will be very challenging." & Rdquo;
Despite the challenges, Lenovo Chairman and Chief Executive Officer Yang Yuanqing is optimistic about the profitability and difficult prospects for the development of mobile business.
He noted that Lenovo's operating tax revenue increased by $ 110 million, he said, mainly due to the improvement of mobile and data center business.
Yang said: "Let me be more confident that we will reverse the mobile business in the second half of 2018, I think the whole association is entering a new stage of growth. & Rdquo;
Mobile business losses narrowed this quarter, revenue growth of 2% to 1.75 billion US dollars. The mobile business is the only sector that has achieved revenue growth, although it accounts for only 17% of Lenovo's total revenue. Lenovo Group this quarter, the total revenue of 10 billion US dollars, flat year on year.
Yang Yuanqing said that in order to protect the profit margins, Lenovo will focus more on the rapid growth of high-end products, such as for gamers and the Millennium generation tailored PC.
Lenovo has given up some low-margin business, such as its cooperation with Google Chromebook; if the parts costs continue to rise, Lenovo will raise the product price.
Lenovo's data center business unit operating loss of 114 million US dollars, a year ago, the loss of 31 million US dollars. Although revenue fell 11%, but Yang Yuanqing is expected to achieve profitability within two years. (Compiled / Lin Jingdong)