Lenovo posts record quarterly results as sales reach $20bn for first time

Revenue rose 17 per cent for the third quarter compared with the same period last year

Lenovo has announced record quarterly results, surpassing $20bn of revenue for the first time ever in a single quarter.

Revenue rose 17 per cent for the third quarter compared with the same period last year to $20.1bn, while net income surged by 62 per cent to reach $640m.

It was the sixth consecutive quarter with net income growing a rate of over 50 per cent, while basic earnings per share stood at 5.50.

"Lenovo continued to embrace the opportunities driven by accelerated digital and intelligent transformation, and our new IT architecture prepared us well with client-edge-cloud-network-intelligence capabilities," said Yuanqing Yang, Lenovo chairman and CEO.

"With another record quarter, we delivered the sixth quarter of more than 50 per cent net income year-on-year growth, and the first $20bn revenue quarter in our history.

"We remain on track to double both our net margin and R&D investment in three years from FY20/21 levels. Once again, we have shown that Lenovo's innovation, transformation strategy, and strong execution can consistently deliver sustainable profitability increases for the future."

Lenovo's Solutions and Services Group saw Q3 revenue growth of 25 per cent year-on-year to $1.5bn, making up 7.1 per cent of the overall group's revenue and with an operating margin of over 22 per cent.

This included managed services sales growth of 50 per cent year-on-year, which Lenovo said was driven by its TruScale as-a-Service offerings announced last quarter.

Its Infrastructure Solutions Group achieved profitability for the first time since the IBM x86 acquisition made in 2014, while revenue grew 19 per cent year-on-year to reach $1.9bn.

Cloud service provider revenue saw 38 per cent growth year-on-year, while enterprise and SMB revenue improved by seven per cent.

And the company's Intelligent Devices Group delivered revenue growth of 16 per cent year-on-year to $17.6bn, with profitability up 21 per cent to $1.4bn.

Lenovo pointed to the success of premium PC segments including workstation and gaming revenue growth while adding that smartphones had maintained a "healthy profit for the seventh consecutive quarter".