Lenovo enjoys buoyant PC sales despite profit decline

Motorola and x86 acquisitions hit profits

Lenovo's profits may be down but it is far from the end of the line for its biggest product the PC with the oft written-off machines flying off the shelves.

The Chinese firm reported a 36.7% drop in net income to $100 million (around £63.8 million, or AU$127 million) for the fourth quarter, though that had nothing to with PC sales and more to do with the acquisitions of Motorola Mobility and IBM's x86 server business.

Total sales for the quarter hit $11.3 billion (around £7.2 billion, or AU$14.3 billion), up 21% on the previous quarter and PC sales accounted for a whopping 63% of that total. Even more impressive was the fact that PC revenues increased 11% to $7.2 billion (around £4.6 billion, or AU$9.14 billion) and the 13.3 million units shipped allowed it to stay on top of the PC market with a share of 19.7%.

Lenovo's losses were well and truly felt in other areas of the company. The Enterprise Business Group that includes servers, storage, software and services saw a pre-tax loss of $45 million (around £28.7 million, or AU$57.1 million) linked to merger and acquisition related expenses that came despite sales of $1.1 billion (around £700 million, or AU$1.4 billion).

Superfish

The Mobile Business Group, which includes Motorola and Lenovo phones, tablets and smart TVs saw turnover of $2.8 billion (around £1.79 billion, or AU$3.5 billion) where there was a high dependency on the Chinese market. This also manifested itself in the fact that the country accounted for $3.1 billion (around £1.9 billion, or AU$3.94 billion) of total sales or 27% of group revenues, a number that was actually flat compared to the previous year.

All in all it has been an up and down quarter for Lenovo as it was the during the same period that it was forced to issue advice to consumers on how to remove the infamous Superfish adware that it covertly installed on thousands of laptops.