Lenovo also saw strong growth in tablets, up ten percent year-over-year, outperforming the market by 29 points, as well as significant year-over-year increases in high-growth product lines such as gaming PC (up 71 percent), Chromebook (up 76 percent ), and detachables (up 91 percent). These are all product lines that Lenovo is ramping up, typified by our new Legion-branded series of gaming laptops launched last month at CES.In our Mobile Business Group, which includes Moto and Lenovo-branded smartphones, Lenovo's quarterly sales were US$2.2 billion, a decrease year-over-year of 23 percent, but an indicative seven percent increase over last quarter, driven by strong growth in mature markets. Pre-tax loss margin for the quarter improved by 0.6 points quarter-to-quarter to 7.1 percent. With 15 million smartphones shipped in the third quarter, Lenovo improved seven percent quarter-to-quarter, including a 20 percent increase in shipments of Moto-branded products. Moto G shipments were up 12 percent year-over-year, aided by an increase in Latin America alone of 23 percent. In India, the world's third-largest smartphone market, Lenovo was a strong smartphone supplier with 9.9 percent market share in the third quarter. For Lenovo's Data Center Group (DCG), which includes servers, storage, software and services, sales in the third fiscal quarter were US$1.1 billion, down 20 percent year-over-year, and three percent quarter-to-quarter. With large quarter-to-quarter revenue gains in North America (up 27 percent), Latin America (up ten percent), and Europe/Middle East/Africa region (up nine percent), Lenovo's DCG business showed signs of improvement quarter to quarter. Lenovo continued its focus on the transformative actions that will help drive long-term DCG competitiveness, such as strengthening our sales teams, investing in the channel, revamping our product lines, building our brand strategy, and adding new partnerships. For example, we have fortified our Global Accounts team, our sales group that services Fortune 500 clients, and saw growth in our DCG business there for the quarter grow 37 percent year-over-year.
Geographic OverviewIn China, in the third fiscal quarter, Lenovo recorded consolidated sales of US$3.5 billion, a two percent decrease year-over-year, but an eight percent increase quarter-to-quarter. China represented 28.5 percent of the Company's total worldwide third quarter sales. Pre-tax income in China increased eight percent to US$180 million year-over-year, with pre-tax income margin gaining half-a point to 5.2 percent. In Asia Pacific, Lenovo had consolidated sales in the third fiscal quarter of US$1.7 billion, a decrease of 14 percent year-over-year, representing 14 percent of the Company's total worldwide sales. The region had a pre-tax loss of US$41 million and a pre-tax loss margin of 2.4 percent. In Europe, Middle East and Africa, consolidated sales in the third fiscal quarter declined 2.7 percent year-over-year to US$3.4 billion, but increased a robust 23 percent quarter-to-quarter, or 27.6 percent of the Company's total worldwide sales. The pre-tax loss was US$102 million with a pre-tax loss margin of three percent. In the Americas, consolidated sales were US$3.6 billion, down eight percent year-over-year, or 29.9 percent of Lenovo's total worldwide sales during the third fiscal quarter. Pre-tax income was US$39 million, with a pre-tax income margin of 1.1 percent. About Lenovo Lenovo (HKSE: 0992) (PINK SHEETS: LNVGY) is a US$45 billion global Fortune 500 company and a leader in providing innovative consumer, commercial, and enterprise technology. Our portfolio of high-quality, secure products and services covers PCs (including the legendary Think and multimode YOGA brands), workstations, servers, storage, smart TVs and a family of mobile products like smartphones (including the Motorola brand), tablets and apps. Join us on LinkedIn, follow us on Facebook or Twitter ( @Lenovo) or visit us at www.lenovo.com.
|LENOVO GROUP FINANCIAL SUMMARY For the fiscal quarter ended December 31, 2016 (in US$ millions, except per share data)|
|Q3 16/17||Q3 15/16||Y/Y CHG|
|Gross profit margin||13.1||%||14.6||%||-1.5pts|
|Other non-operating expenses||(37||)||(59||)||-37||%|
|Profit for the period||107||294||-64||%|
|Profit attributable to equity holders||98||300||-67||%|
|EPS (US cents)|