Lenovo, the world’s largest pc manufacturer, managed to beat analysts’ expectations, despite a lower demand for certain gadgets. It managed to outperform forecasts through a rigorous cost-cutting plan.
Smartphone sales growth slows down
Lenovo’s turnover did drop extensively, from 14.1 billion dollars (12.9 billion euro) to 12.9 billion dollars (11.8 billion euro), down an astonishing 8.5 %. However, its net profit grew 18.6 % to 300 million dollars (273.5 million euro), after analysts had predicted a 226.3 million dollar (206.3 million euro) net profit.
Higher profits are the result of lower company costs, although the company did also point to the exchange rate fluctuations to account for its lower turnover. According to Lenovo, turnover would have only dropped 2 % if exchange rate fluctuations are ignored.
Lenovo managed to counter years of lower computer sales with increased smartphone sales, but that market’s growth has grinded to an almost complete stop in 2015. Analysts even expect growth to slow down even more over the next few years, while consumers have yet to make the plunge towards other gadgets like smartwatches.
