Both Hewlett Packard and Lenovo have both published quarterly financial results in the last few hours. Looking at the headline financial figures, these twin titans of the PC making industry couldn’t be much more different.
Lenovo: profits up 90 per cent year on year
China based Lenovo has reported record revenue of US$7.8 billion from its latest quarter. From this income the company made a net profit of $127 million. The profit figures embody a growth of 90 per cent year on year.
In its Chinese home market Lenovo managed to make more money out of its PC sales by increasing margins eight per cent year on year. Meanwhile its mobile devices business continued to grow with shipments up over 200 per cent year on year. Now mobile devices make up nearly 10 per cent of Lenovo’s business overall.
Even though global PC shipments were down 13.9 per cent during the most recent quarter, according to IDC, Lenovo still managed to show these impressive results while experiencing flat demand for PCs. Going forward Lenovo plans to invest more in tablets, smartphones and enterprise hardware according to a statement by CEO Yang Yuanqing.
HP: profits down 32 per cent year on year
HP’s revenue during its latest quarter was $27.6 billion and it made profits of $1.08 billion. Profits are said to be down 32 per cent year on year (and were 10 per cent down from last quarter). However in aftermarket trading HP’s shares soared, by up to 13 per cent, as the results were still better than had been predicted in HP’s previous financials.
CEO Meg Whitman told investors “The turnaround is on track, maybe it's working a little better than we anticipated”. The WSJ notes that the turnaround and rebuilding of HP “was borne out in the most recent quarter, as revenue dropped in each of H-P's four major lines of business”.
Looking specifically at the PC business; revenue slipped by almost 20 per cent. HP’s better than expected results were mainly due to continued cost cutting during the most recent quarter. We have seen some new HP hybrid PC and Android devices emerging but any success from these efforts will be evident in future results. An analyst talking to the WSJ said he had a “nagging question” in his mind about what will happen when HP has cut costs as far as it can.
