Lenovo reports nearly double profits

18 Aug 2011

Quarterly profit nearly doubled on strong emerging market sales for the world’s No 3 PC manufacturer, Lenovo.

During the first quarter, Lenovo’s worldwide PC shipments grew 23.1pc year-over-year, the company said. Comparatively, industry PC shipments increased just 2.7pc worldwide for the same period, marking the ninth quarter in a row that Lenovo has grown faster than the industry.

Consolidated sales for the first fiscal quarter ended 30 June 2011 rose 15pc year-over-year to a record of US$5.9bn. The company’s gross profit for the quarter increased 41pc year-over-year, with gross margin at 12.5pc. Operating profit for the quarter grew 51pc year-over-year to US$123m. Operating profit margin continued to expand, even after Lenovo’s reinvestment in branding, R&D and mobile internet business to drive future growth.

For the fiscal quarter, Lenovo reported a pre-tax income of US$123m, a 64pc jump year-over-year. Profit attributable to equity holders for the quarter was US$108m, an increase of 98pc year-over-year. Basic earnings per share for the first fiscal quarter was US1.11 cents, or HK8.63 cents. Net cash reserves as of 30 June 2011, totalled US$3.6bn.

The results come as Lenovo expands into mobile internet, competing with Apple and other rivals, and in developed markets with an acquisition this year in Germany of MEDION AG and a joint venture in Japan with NEC Corporation.