Eleven years after Lenovo acquired IBM’s x86 server biz, profits are still elusive

Lenovo has again said its enterprise hardware business is on the cusp of becoming consistently profitable, despite the division again posting a loss after massive revenue growth.

The Chinese hardware champ today posted $20.5 billion of revenue for its second quarter, a 15 percent year-over-year improvement. Profit fell one percent, to $380 million. Lenovo’s enterprise hardware biz, the Infrastructure Solutions Group (ISG), outperformed the company in terms of revenue growth with its $4.1 billion revenue coming in 24 percent higher than in the corresponding quarter last year. Even with that extra revenue, it again posted a $32 million loss.

Lenovo built the ISG on the x86 server business it acquired from IBM in 2014, but then could not run at a profit until 2022 before it again sank into the red. ISG has since posted a mix of tiny profits and modest losses.

Company leadership thinks it ...