Lenovo's Android smartphone division is still bleeding money, having posted a pre-tax loss of $142 million in the fourth quarter of the company's 2017 fiscal year which ended March 31. While the deficit is significantly smaller than the $220 million loss recorded over the same three-month period last year, the change is a result of Lenovo's aggressive cost-cutting efforts and not improved commercial performance, with its mobile division also seeing its quarterly revenue drop to $1.34 billion, $430 million down year-on-year.
Lenovo's overall prospects are significantly more positive even as its group-level profits attributable to shareholders suffered a sharp decline from $107 million in Q4FY2016/17 to $33 million in the recently concluded quarter. The Hong Kong-based original equipment manufacturer acknowledged the issue but expects its results to improve in the coming months, pointing to the significant growth of its data center and PC businesses as reasons for optimism. While profits decreased, revenues rose eleven percentage points annually, having reached $10.64 billion as part of the first double-digit turnover jump in two and a half years. On an annual basis, Lenovo recorded $45.3 billion in revenue, five-percent up compared to the previous fiscal period, and slashed its losses to $189 million, whereas its fiscal 2016 bottom line was $535 million in the red. The Chinese tech giant pointed to a non-cash write-off amounting to some $400 million as the main reason for the yearly loss, adding that the move was related to the U.S. tax reform in late 2017.
Lenovo's mobile division is still enjoying strong performance in Latin America and also owns the best-selling unlocked smartphone brand in North America – Motorola. The subsidiary is planning on cutting down the number of its handset models released over the course of this year while still debuting enough new products to target virtually every price bracket on a worldwide level, the company's newly appointed President Sergio Buniac said last month.