Lenovo 1Q Profit Up 30% on Rise in PC Shipments
08/15/2012| 11:56pm US/Eastern
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BEIJING -- Chinese computer maker Lenovo Group Ltd. said Thursday first-quarter net profit rose 30% from a year earlier due to strong growth in personal-computer shipments in emerging markets.
Net profit for the three months ended June 30 rose to $141.4 million, or $1.33 a share, from $108.8 million, or $1.08 a share a year earlier, beating analysts' forecast of $133.8 million.
Revenue rose 35% to $8.01 billion from $5.92 billion, slightly below expectations of $8.13 billion predicted by analysts in a poll.
In a conference call with analysts, Lenovo Chairman Yang Yuanqing said the company continued to outperform competitors, and is inching closer to beating out Hewlett Packard Co. to become the world's largest PC vendor.
The executive's comments came amid growing concerns over a slowdown in China's economic growth. Lenovo, the biggest competitor in China's PC market with a 30% share, has been redoubling efforts to expand in other emerging markets such as India, Indonesia, Brazil, Argentina and Mexico, where demand is expected to rise among consumers buying PCs for the first time. Lenovo is also spending about $800 million on a new base to house the development, production and sale of mobile products such as smartphones, a relatively new market for it.
Lenovo has been outperforming rivals in the global PC market, even though demand for traditional PCs has been sluggish compared with the growing popularity of mobile Internet devices such as smartphones and tablet computers.
Mr. Yang said that sales in China would continue to grow as Lenovo taps developing cities and China's relatively low PC penetration rate continues to rise. Lenovo's PC shipments in China rose 9.2% in the most recent quarter, while sales in other emerging markets jumped 59.2%.
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