Lenovo posts 6% profit growth amid strong services sales

Lenovo posts 6% profit growth amid strong services sales

Server and business solution sales contributed to the increase in earnings to US$541 million.

Lenovo’s non-PC businesses show promise as computer sales decline. (Lenovo pic)
SHANGHAI:
Lenovo’s net profit grew 6% on the year in the July-September quarter, the Hong Kong-based computer giant reported Thursday, with services showing strength amid slumping global PC sales.

Sales of servers and business solutions helped push up profit to US$541 million. Overall revenue fell 4% to US$17 billion.

By segment, revenue fell 11% in Lenovo’s intelligent devices group, which includes PCs and supplies roughly 80% of Lenovo’s overall revenue.

Revenue rose 26% in the solutions and services group, which sells to retail, educational and other customers. The infrastructure solutions group, which includes server sales, posted 33% growth.

The intelligent devices group’s operating profit fell 12% but still accounted for about 70% of the overall total. Solutions and services posted 29% growth, while infrastructure solutions swung to the black.

“Our non-PC businesses are gaining momentum and now represent more than 37% of our revenue,” Lenovo Chairman and CEO Yang Yuanqing said in a news release.

With the global PC market in a slowdown, the strength of businesses other than personal computers will remain key to future growth.

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