Lenovo Q3 Profits Up, But Acquisitions Will Cause Short Term Stumble

Lenovo's Q3 (October to December) financial report is in, and with it comes a slew of milestones for the company, as well as increases in quarterly revenue and record shipment numbers. Among it all came a warning, however, that the company's recent acquisitions — most notably the Motorola acquisition — will cause a short term hit to the company's future performance.

The warning was given by Lenovo's CEO Yang Yuanqing, who said in an interview after the financial report was released, "In the short term, (the deals) will have a negative impact on performance." The company went on to specify that the Motorola acquisition, in particular, will take an estimated three to five quarters to turn around from its current financial output.

As far as the third quarter went, however, Lenovo saw good things, among them being a quarterly revenue of $10.8 billion, the first time it has passed the $10 billion milestone mark and a 15-percent jump from the same quarter in the previous year. Pre-tax income for the quarter was up 30-percent year-on-year, hitting $321 million, and earnings increased the same 30-percent, reaching $265 million.

Shipments hit 32.6 million devices over the third quarter, which amounted to just about five devices every second. Lenovo managed to hit its highest yet quarterly market share at 18.5-percent, an increase of 2.4-percent over the same quarter in the previous year. The company shipped 17.3 million smartphones and tablets, as well, trumping its 15.3 million PC sales.

VIA: Reuters

SOURCE: Lenovo