Lenovo Group Ltd (聯想) surged the most in a year after posting profit that beat estimates, with the Chinese company expanding its global market share for personal computer and smartphone sales.
The shares in Hong Kong rose by as much as 8.6 percent, the biggest gain on an intraday basis since January last year. Net income was US$253 million in the quarter ended December last year, compared with the US$182.4 million average of analysts’ estimates compiled by Bloomberg.
CEO Yang Yuanqing (楊元慶) is defying weak growth in the PC industry by increasing sales, margins and market share, as he expands in smartphones and servers. Lenovo bolstered that push with US$5 billion of acquisitions last year, including buying Motorola Mobility from Google Inc and purchasing IBM Corp’s low-end server unit.
Photo: Bloomberg
“The acquisitions are performing as we expected, but PC business profitability was much better, which indicates a stronger presence and ability to obtain profits,” Alberto Moel, a Hong Kong-based analyst at Sanford C. Bernstein & Co, said in an e-mail.
The purchase of Motorola helped Lenovo boost global smartphone shipments 78 percent in the quarter to 24.7 million units, vaulting into third place worldwide, International Data Corp (IDC) said on Thursday last week. Its market share expanded to 6.6 percent from 4.8 percent a year earlier, IDC said.
“We are very fortunate that both of the acquired businesses performed pretty well,” Yang said in a telephone interview after the results. “Motorola is growing volume very fast — they almost doubled volume year on year — and for the first time delivered more than 10 million units last quarter.”
Yang reaffirmed his forecast to end losses at Motorola within four to six quarters.
Lenovo, with headquarters in Beijing and Morrisville, North Carolina, reported sales rose 31 percent to US$14.1 billion in the third quarter, from US$10.8 billion a year earlier. That compares with the US$13.5 billion average of 20 analysts’ estimates compiled by Bloomberg.
“Lenovo’s business segments now are more geographically diversified, and they have a better range of products,” Hong Kong-based Guotai Junan International Holdings Ltd (國泰君安證券) analyst Ricky Lai (賴健邦) said. “The company is less dependent on the China market and less dependent on PC products.”
Net income in the period was brought down by about US$131 million of non-cash acquisition related accounting charges related to Motorola and the server unit, the company said.
While industrywide global PC shipments rose 1 percent in the quarter ended in December last year, Lenovo posted a 7.5 percent increase, researcher Gartner Inc reported on Jan. 12.
Lenovo’s share of the PC market expanded to 19.4 percent from 18.3 percent a year earlier. Hewlett-Packard Co was second.
Completion of the IBM transaction made Lenovo the third-largest server vendor in the world behind Hewlett-Packard and Dell Inc, the company said. The new server unit will hit US$5 billion in sales within a year, with margins beating those of the company’s PC unit, Yang said.
Napoleon Osorio is proud of being the first taxi driver to have accepted payment in bitcoin in the first country in the world to make the cryptocurrency legal tender: El Salvador. He credits Salvadoran President Nayib Bukele’s decision to bank on bitcoin three years ago with changing his life. “Before I was unemployed... And now I have my own business,” said the 39-year-old businessman, who uses an app to charge for rides in bitcoin and now runs his own car rental company. Three years ago the leader of the Central American nation took a huge gamble when he put bitcoin
Demand for artificial intelligence (AI) chips should spur growth for the semiconductor industry over the next few years, the CEO of a major supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said, dismissing concerns that investors had misjudged the pace and extent of spending on AI. While the global chip market has grown about 8 percent annually over the past 20 years, AI semiconductors should grow at a much higher rate going forward, Scientech Corp (辛耘) chief executive officer Hsu Ming-chi (許明琪) told Bloomberg Television. “This booming of the AI industry has just begun,” Hsu said. “For the most prominent
PARTNERSHIPS: TSMC said it has been working with multiple memorychip makers for more than two years to provide a full spectrum of solutions to address AI demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it has been collaborating with multiple memorychip makers in high-bandwidth memory (HBM) used in artificial intelligence (AI) applications for more than two years, refuting South Korean media report's about an unprecedented partnership with Samsung Electronics Co. As Samsung is competing with TSMC for a bigger foundry business, any cooperation between the two technology heavyweights would catch the eyes of investors and experts in the semiconductor industry. “We have been working with memory partners, including Micron, Samsung Memory and SK Hynix, on HBM solutions for more than two years, aiming to advance 3D integrated circuit
NATURAL PARTNERS: Taiwan and Japan have complementary dominant supply chain positions, are geographically and culturally close, and have similar work ethics Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other related companies would add ￥11.2 trillion (US$78.31 billion) to Japan’s chipmaking hot spot Kumamoto Prefecture over the next decade, a local bank’s analysis said. Kyushu Financial Group, a lender based in Kumamoto’s capital, almost doubled its projection for the economic impact that the chip sector would bring to the region compared to its estimate a year earlier, a presentation on Thursday said. The bank said that 171 firms had made new investments since November 2021, up from 90 in an earlier analysis. TSMC’s Kumamoto location was once a sleepy farming area, but has undergone
RSS