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Business

Lenovo's revenue up, but earnings dip

Tech giant Lenovo's revenue rose significantly in its past fiscal year on the back of its purchase of Motorola in 2014 as the world's biggest PC maker diversified into the smartphone market. But profit growth slowed.

China's Lenovo said Thursday its revenue rose by 20 percent to $46.30 billion (41.70 billion euros) in its past fiscal year ending March 31.

Revenue from the company's mobile business including Motorola increased 71 percent year-on-year to $9.14 billion, making up about a fifth of the revenue total. Net profit, however, was up only 1 percent at $829 million due to increased operating expenses, the company said in a filing to the Hong Kong stock exchange.

Lenovo purchased IBM's PC business in 2005, and took over Hewlett-Packard to become the world's biggest PC maker by shipments last year.

However, as the global market for personal computers has become saturated, Lenovo has diversified into other fields of activity such as smartphones and servers.

Non-PC market expansion

"The rise of new technology and market trends, particularly the social mobile Internet, has posed market opportunities and challenges as consumer behavior is changing," the company said in the filing.

Smartphone shipments worldwide grew more than 50 percent year-on-year to 76 million "driven by aggressive business expansion in emerging markets outside of China from Lenovo brand products and strong growth of the Motorola brand products," it added.

The group's non-PC revenue contribution rose to 28 percent from 18 percent in the same period last year, while operating expenses were up almost 40 percent at $5.57 billion.

In its third-quarter results published in February, Lenovo said mobile phone shipments had surged almost 80 percent thanks to its $2.9 billion purchase of Motorola from Google in October. That buyout happened soon after Lenovo paid $2.3 billion for IBM's low-end server business.

sri/hg (AFP, dpa)