Lenovo Q4 profit gains 90 percent as PC share rises


Fri, May 24, 2013 - Page 15

Lenovo Group Ltd, the world’s second-biggest maker of personal computers, reported a 90 percent gain in fourth-quarter profit after increasing its market share and boosting smartphone sales.

Net income climbed to US$126.9 million in the three months ended March, from US$66.8 million a year earlier, Lenovo said in a statement yesterday.

That beat the US$108.1 million average of eight analysts’ estimates compiled by Bloomberg.

Lenovo is developing mobile devices such as smartphones and tablets as it seeks to lure customers from Apple Inc and Samsung Electronics Co and weather a global slump in demand for PCs.

The company maintained PC sales and expanded market share in the quarter, even as global shipments dropped 13.9 percent, researcher International Data Corp (IDC) reported last month.

“Somebody over there is doing something right,” Alberto Moel, an analyst at Sanford C. Bernstein & Co in Hong Kong, said by telephone.

“The size of the beat is quite solid. They did better margins everywhere, with material expansion in PCs in Europe, Middle East and Africa as well as North America, while the smartphone business also continued to improve,” he added.

Revenue rose 4.5 percent to US$7.83 billion. That compares with the US$7.98 billion average of 14 estimates compiled by Bloomberg.

Lenovo stock has climbed 2.6 percent this year, surpassing the 0.1 percent gain for the city’s Hang Seng Index.

Lenovo was the only one of the top five vendors to avoid a decline in PC shipments, and boosted its share of the global PC market to 15.3 percent in the period, from 13.2 percent a year earlier, as the company “continues to execute on a solid ‘attack’ strategy,” IDC said in last month’s report.

Lenovo narrowed the gap with market leader Hewlett-Packard Co, which saw its share fall to 15.7 percent from 17.7 percent, according to IDC.

Lenovo introduced touchscreen handsets in Russia, India, Indonesia, Vietnam and the Philippines last year following the debut of its first model in China in 2010.

The company this month said it will introduce its first smartphones in Africa, with a release planned for Nigeria before the end of the year.

The company cemented its position as the second-largest smartphone vendor in China, behind Samsung, by more than tripling shipments in the quarter, Lenovo said yesterday.

The Mobile Internet Digital Home unit that sells handsets boosted total sales 74 percent to US$736 million in the period, while profitability “continued to improve,” the company said.