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HP & Lenovo Benefit From PC Demand Despite Industry Gloom

Tom Jowitt is a leading British tech freelance and long standing contributor to TechWeek Europe

Positive financial results at two largest PC makers despite gloomy PC market

Two of the world’s largest PC markers have reported positive financial results on the back of PC sales, going against the prevailing trends within the industry.

 Lenovo, which is the world’s largest PC maker, returned to profit as its PC shipments declined at a slower rate than the overall market.

And HP Inc reported better than expected results, as both its PC and printer business grew for the first time in seven years.

Lenovo YOGA 3 11in LaptopLenovo Growth

Lenovo for its part reported that made it had made “good progress in implementing and executing its new “three-wave strategy.”

For the fourth quarter ending 31 March, it posted a net profit of $107m (£82.6m) on sales up 5 percent at $9.6bn (£7.4bn). But its full year figures revealed a profit of $535m (£413m) in the year to March on revenue that fell 4 percent to $43bn ($33.2bn).

“Despite challenging market conditions, Lenovo saw revenue resume to growth in the fourth quarter, after five quarters of decline,” said Yang Yuanqing, Lenovo Chairman and CEO.

“To drive  further growth, we have clearly defined the three-wave  strategy. We will maintain PC leadership in scale, profitability and innovation in the first wave, while building our second wave, mobile and data centre businesses into growth engines. Simultaneously, we will execute our third wave of ‘Device + Cloud’ and ‘Infrastructure + Cloud’ to capture the opportunities brought by new technologies.”

Lenovo said that sales at its PC and Smart Devices (PCSD) business group for the full year were down 2.3 percent but still beat the overall market, at $30bn (£). It said that shipments for the year beat the market significantly by 7.1 points, with 66.6 million.

This is despite Gartner reporting earlier this year that global PC shipments had fallen for the 10th consecutive quarter in January-March, dipping below 63 million units for the first time since 2007.

HP ‘Breakthrough’

Meanwhile there was also good news over at HP Inc, which last year revealed it would cut between 3,000 and 4,000 jobs over the next three years due to challenges in the personal computer and printer markets.

For the second quarter ending 30 April, HP reported a net profit of $559m (£431m) down from $629m (£485m) in the same year-ago quarter.

Revenues meanwhile rose to $12.4bn (£9.6bn) from $11.6bn (£8.9bn) a year ago.

HP said that revenue at its Personal Systems group rose 10 percent year-over-year, with total units shipped up 5 percent (notebooks units up 12 percent and Desktops units down 6 percent).

And the good news did not stop there, as HP revealed that its revenue from Printing rose 2 percent year over year, with total hardware units shipped up 4 percent.

HP had acquired Samsung’s printer division for $1bn (£772m) last year.

“This was a breakthrough quarter for HP, and marks the first time both Personal Systems and Print have grown in the same quarter since 2010,” said Dion Weisler, President and CEO, HP Inc.

“We’re delivering solid performance across our portfolio, in all regions, and on key financial metrics,” said Weisler. “Our team is taking profitable share, out-executing our competitors and delivering some of the best innovation in HP’s history. It’s clear our reinvention is paying off.”

HP is no doubt being helped by the popularity of its MacBook Air-challenging Spectre 13 laptop. It has also unveiled of laptops with built-in privacy screens designed to curtail snoopers in the physical world; something that’s likely to appeal to people working in sectors where privacy is paramount.

That said, earlier this month it was revealed that HP laptops may have been logging user keystrokes for several years.

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