Lenovo Posted Better Profitability in Q2 2016

Earlier today, the Chinese tech giant Lenovo posted its Q2 2016 financials. The good news is that the Beijing-based company's restructuring strategies have seemingly started paying off, as Lenovo apparently saved approximately $1 billion in mobile expenses in the last 18 months. Furthermore, the Chinese firm managed to increase its quarterly profits by 12% in comparison to the same period from last year. On the downside, its revenue has declined by 8% in that time frame.

Not surprisingly, Lenovo is still optimistic about its short-term prospects, as the company's latest interim results state that Lenovo's mobile division will likely turn things around by mid-2017. Over the course of the second quarter of 2016, the company recorded $11.2 billion in revenue. While this is a significant decrease in comparison to Q2 2015, Lenovo is now more profitable. While the company posted a $714 million loss during the second quarter of last year, it has now managed to record $157 million in profits. While that still leaves a lot of room for growth, the firm's situation seems much better than it did 12 months ago, in spite of declining revenue.

Regarding Lenovo's smartphone business specifically, phone shipments have mostly stagnated during this last financial period. More specifically, Lenovo shipped 361 million units during Q2 2016, only 0.4% more than it did in Q2 2015. However, stagnating sales aren't the worst sign when you combine them with the said savings Lenovo made in this segment. Namely, when you manage to cut your expenses by $1 billion in a year and a half and still achieve similar shipment numbers, it's obvious you're doing something right as far as efficiency is concerned.

In overall, these aren't terrible results by any margin, especially seeing how Lenovo's mobile division was unable to turn a profit ever since the Chinese tech giant acquired Motorola from Google back in 2014. Earlier this year, the Beijing-based company admitted that its purchase of Motorola didn't meet expectations, but in the long term, it may still pay off. In the short term, Lenovo is pleased with how the Moto Z took off and it expects to sell three million units of the said device in the first 12 months, which is why the company is currently producing 60,000 units on a monthly basis.

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Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]
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