Lenovo reported a strong improvement in results for its fiscal second quarter, supported by a return to breakeven at Motorola and continued growth in the PC business. Group revenue reached USD 13.4 billion, up 14 percent year-over-year, and operating profit more than tripled, to USD 290 million from USD 88 million a year ago. The net profit increased 21 percent to USD 168 million, and Lenovo proposed a stable interim dividend of HKD 0.06 per share.
The main milestone for the group was a breakeven operating result for Motorola worldwide and the entire mobile phone business outside China. This was supported by a 65 percent year-on-year increase in shipments in North America in the first half, driven by mainstream models such as the Moto G6 and E5 and carrier expansion. Lenovo also continued to grow in Latin America, where Motorola remains the number-two brand.
Total mobile phone shipments were still down 20 percent year-on-year in the fiscal first half, as Lenovo continued to struggle in China and narrowed its focus in other markets. Revenue at the mobile business fell 15 percent year-on-year in the first half to USD 3.25 billion, while the pretax loss narrowed to USD 146 million from USD 337 million a year ago.
At the PC business, revenue for the six months was up 18 percent to USD 18.87 billion, and pretax profit jumped 42 percent to USD 940 million, thanks to an improved product mix with a higher share of shipments to the commercial segment. Lenovo said it was the fastest-growing PC group in the quarter and also regained the number-one position in shipments, according to IDC figures.
