21.6% Global PC Market Share, Number One Position

Lenovo announced its third quarter results for the fiscal year ended December 31, 2015. Quarterly revenue was USD 12.9 billion, down 8% year-over-year, but down only 2% excluding the impact of currency fluctuations. Pre-tax income (PTI) for the third quarter, excluding non-cash, M&A-related accounting charges of USD 77 million, was USD 397 million, and reported pre-tax income was USD 320 million, up 17% year-over-year. This exceeded analyst expectations. Net income was USD 300 million, up 19%, which also surpassed analyst forecasts.

Lenovo's bold organizational restructuring plan announced in August 2015 is expected to generate USD 1.35 billion in annual cost savings. Through these savings, Lenovo has achieved a significantly lower cost structure compared to its peers. Through solid execution and innovation, Lenovo is strengthening its position to maintain strong operations despite recent challenging conditions by implementing changes to its business model, processes, and organization.

Yang Yuanqing, Chairman and CEO of Lenovo, stated, "Despite being impacted by global macroeconomic headwinds, significant currency fluctuations in major markets, and PC market declines last quarter, Lenovo once again achieved strong profitability and delivered on our commitment to improve the mobile business. In the next quarter, we will accelerate growth in the PC segment by leveraging integration trends, enterprise PC replacement cycles, and innovative product category opportunities. In the mobile business, we will achieve scale and efficiency to accelerate growth in emerging markets and pursue breakthroughs in mature markets through innovative products and premium brands. We will also expand our presence in China's open market with an even stronger product portfolio. In the enterprise business, we plan to leverage industry-leading technology and strategic partnerships to drive higher revenue growth."

Lenovo's third quarter gross profit was USD 1.9 billion, down 10% year-over-year, with a gross profit margin of 14.6%. Operating profit for the third quarter was USD 379 million. Basic EPS for the third quarter was USD 2.71 cents (21.01 Hong Kong cents). As of December 31, 2015, net debt was USD 49 million.