At the same time, the largest restructuring program in Lenovo’s history delivered a better cost structure with US$690 million of savings in the 2nd half of the year, sending 4th quarter PTI up 86 percent year-over-year to US$193 million. Annual loss before tax was US$277 million. Fourth quarter net income was up 80 percent year-over-year to US$180 million, while full year net loss was US$128 million, even after US$330 million in non-cash M&A related accounting charges.
“Last quarter, despite challenging economic and industry conditions that hurt our top line, the decisive actions we took mid-year allowed us to protect our profitability. We kept our core PC business strong, continuously improved profitability in enterprise and saw positive momentum in some key smartphone markets.” said Yang Yuanqing, Lenovo Chairman and CEO.
“Facing the operational issues in the businesses, we have already taken a number of proactive actions, including making key decisions in organization, leadership, products and channels to get back to growth in mobile, and adopting a new multi-business operating system to unleash the productivity and creativity of each business. At the same time, we will integrate our traditional strength in end-user devices with our new capabilities in cloud and infrastructure to attack the balanced Device + Cloud opportunities.”
Even while facing internal and external challenges, and working through major restructuring and reorganization programs, Lenovo still delivered these operational and financial achievements: Strengthened position as global PC leader with strong profits and record market share, up 1.3 pts to 21 percent. Record market share in tablets, out growing the market, ranking #3 with nearly 11 million units shipped in the year and Interbrand named Lenovo one of the world’s Top 100 brands.
Gross profit for the full year was US$6.6 billion, a decrease of 1 percent year-over-year. Fourth quarter gross profit was US$1.5 billion, down 15 percent. Gross margin was 14.8 percent and 16.6 percent for the year and quarter, respectively.
Operating loss for the full fiscal year was US$62 million and profit of US$248 million for the quarter, up 95 percent over the fourth quarter of last year. Basic earnings per share in the fourth fiscal quarter was 1.63 US cents, or 12.67 HK cents; basic loss per share was 1.16 US cents, or 9.00 HK cents for the full fiscal year. Lenovo’s Board of Directors declared a final dividend of 2.64 US cents, or 20.5 HK cents per share for the fiscal year ended March 31, 2016.