Chinese technology giant Lenovo has reported a decent jump in quarterly profits. A closer look at its business figures revealed that the positive result was mainly due to cost-cutting measures, while PC sales slumped.
Beijing-based Lenovo announced Thursday it had logged a staggering 64-percent increase year on year in net profit for the firm’s first fiscal quarter. The company said bottom-line earnings amounted to $173 million (153 million euros).
However, revenues in the quarter sank by 6 percent to $10.1 billion due to slowing sales in Lenovo’s PC and fledgling mobile handset businesses.
The Chinese technology giant has traditionally manufactured computers, but has recently been trying to broaden its smartphone business as the market for PCs fizzles.
But Lenovo has struggled to keep pace with Apple and Android rivals, seeing its revenue from its PC and smart device division – including tablet computers – drop by 7 percent to $6.99 billion in the first quarter.
Revenues from its mobile business also fell by 6 percent, with the division reporting an operational loss of $163 million.
Last August, Lenovo announced plans to slash costs and cut 3,200 jobs from it non-manufacturing workforce. The company acquired IBM’s low-end server business in 2014 in a bid to expand business beyond PCs.
hg/jd/ (Reuters, AFP)