Lenovo Group Ltd (聯想), China’s biggest personal-computer maker, reported fourth-quarter profit that beat analysts’ estimates on increased sales in Europe.
Net income more than doubled to US$140 million in the three months ended March 31, from US$60 million a year earlier, the Raleigh, North Carolina-based company said in a statement yesterday. The median of seven analyst estimates compiled by Bloomberg was for profit of US$133 million.
Chief executive officer William Amelio increased profit for the sixth successive quarter by increasing PC sales through dealers and the Internet in Europe.
In January, the company introduced its line of IdeaPad notebooks to lure individual consumers, a market that will outgrow Lenovo’s main business of serving corporate customers, according to researcher IDC.
Sales from continuing operations rose to US$3.74 billion from US$3.29 billion, the statement said. Lenovo’s profit was boosted by a pretax gain of US$65 million from the sale of its mobile phone unit, which was completed in March, the company said.
Lenovo raised PC shipments in central and eastern Europe by 56 percent in the quarter, the company said.
The Chinese computer maker, which moved its headquarters to the US after acquiring International Business Machines Corp’s PC unit in 2005, failed to match the gain in shipments at larger rivals Dell Inc and Acer Inc in the quarter.
Lenovo raised PC shipments 21 percent in the three months ended March, compared with 66 percent for Taiwan’s Acer, and 22 percent for Dell, according to IDC.
The company’s full-year profit tripled to US$484.3 million. Net income beat the US$477 million median estimate of seven analysts surveyed by Bloomberg.
Sales from continuing operations rose to US$16.35 billion from US$13.98 billion, it said.
The Chinese company will “participate” in the market for low-cost laptops, Amelio said at a briefing in Hong Kong yesterday, without giving a timeframe.
Acer, based in Taipei, said last month it will offer several notebooks for less than US$500 from June, joining Dell and Hewlett Packard Co in tapping the market for lower-specification computers.
Gross profit margin, or the percentage of sales left after deducting production costs, narrowed to 15 percent in the three months to March, matching the median estimate of three analysts surveyed by Bloomberg.
That compares with 15.2 percent in the previous quarter.
PC makers’ profitability may be threatened as they face higher prices from their suppliers. Compal Electronics Inc (仁寶電腦) and Quanta Computer Inc (廣達電腦), the world’s two largest contract manufacturers of laptops, said this month they plan to raise prices because of higher labor and material costs.
“Increase in labor costs will affect our operations,” chairman Yang Yuanqing (楊元慶) said at yesterday’s briefing.
Lenovo’s sales growth in the Americas region slowed to 2.9 percent in the fiscal fourth quarter, after expanding 10.4 percent in the previous three months. The slowdown in the US economy affected demand for notebooks, the company said.
The US computer market is “challenging,” chief financial officer Wong Wai-ming (黃偉明) said yesterday.
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Huawei Technologies Co’s (華為) latest smartphones carry a version of the advanced made-in-China processor it revealed last year, results from an independent analysis showed. This underscored the Chinese company’s ability to sustain production of the controversial chip. The Pura 70 series unveiled last week sports the Kirin 9010 processor, research firm TechInsights found during a teardown of the device. This is a newer version of the Kirin 9000s, made by Semiconductor Manufacturing International Corp (SMIC, 中芯) for the Mate 60 Pro, which had alarmed officials in Washington who thought a 7-nanometer chip was beyond China’s capabilities. Huawei has enjoyed a resurgence since
purpose: Tesla’s CEO sought to meet senior Chinese officials to discuss the rollout of its ‘full self-driving’ software in China and approval to transfer data they had collected Tesla Inc CEO Elon Musk arrived in Beijing yesterday on an unannounced visit, where he is expected to meet senior officials to discuss the rollout of "full self-driving" (FSD) software and permission to transfer data overseas, according to a person with knowledge of the matter. Chinese state media reported that he met Premier Li Qiang (李強) in Beijing, during which Li told Musk that Tesla's development in China could be regarded as a successful example of US-China economic and trade cooperation. Musk confirmed his meeting with the premier yesterday with a post on social media platform X. "Honored to meet with Premier Li