Lenovo stock surges 11% as revenue climbs to 4-year high, profits improve

MORRISVILLE – Shares in Lenovo surged some 11 percent in trading early Thursday after the global tech conglomerate’s latest financials ignited positive interest among investors.

The company, which operates global headquarters in Morrisville and Bejing, said its quarterly revenue rose to a four-year high, up more than 8 percent year-over-year. Lenovo also now has reported year-over-year revenue growth for the last six quarters.

Lenovo reported $14 billion in revenue overall.

And its profit of $233 million represented a huge turnaround fro 2017’s fourth quarter loss of $289 million. The profit exceeded analysts’ expectations of $207 million, according to Reuters.

Interestingly, Lenovo’s smartphone business reported its first profit (some $3 million) since the acquisition of Google’s smartphone business in 2014.

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Pretax income, meanwhile, hit a company high of $350 million, a 133 percent jump from a year earlier, according to the company.

Chair and CEO Yang Yuanqing attributed the performance in large part to a reorganization plan that he put in place over the past two years.

“When we set out on our journey of Intelligent Transformation, our goal was to restore and then accelerate Lenovo’s business momentum, while providing our customers and partners with the best technologies in smart IoT, smart infrastructure and smart vertical solutions,” Yang said in a statement.

“We’ve done exactly that and more – our strength and position as the industry’s most prolific global technology organization is firmly established. What I’m most pleased to see is how Lenovo is bucking the current industry trend – we’re strong, have delivered record-breaking results this quarter and are only getting stronger.”

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The growth came despite lingering trade war issues between the United States and China. Most of Lenovo’s revenue comes from those two countries.

Lenovo operates three different business groups:

The Intelligent Devices Group (IDG), which includes PC and Smart Devices Business Group such as PCs, andtablets, augmented and virtual reality and smart devices, as well as the Mobile Business Group (MBG) for smartphones. Revenue for this group rose more than 11 percent year-over-year to $10.7 billion.
The Data Center Business Group (DCG), which is based in RTP. It includes servers, storage, networking, software and services. Revenue jumped more than 30 percent to $1.6 billion.
The Lenovo Capital and Incubator Group (LCIG) that focuses on investments in startups.

Lenovo shares trade on the Hong Kong stock exchange.