Lenovo reported strong fiscal third quarter results as its PC market share crept up to 14 percent globally and 35.3 percent in China.
The company reported a third quarter profit of $154 million, or $1.46 a share, on revenue of $8.37 billion, up 44 percent from a year ago. Lenovo’s sales surged from a year ago due to a joint venture with NEC and the acquisition of Medion.
Lenovo deploys a strategy it calls “protect and attack.” In a nutshell, Lenovo is looking to protect share in mature markets—U.S., Japan and Europe—and grow the business in emerging markets such as Brazil. Lenovo also aims to own China, its home base.
According to the company, Lenovo’s shipments were up 44 percent from a year ago as the PC industry was flat. Lenovo CEO Yang Yuanqing said the company was able to navigate the hard drive shortage and grow its mobile business. Lenovo sold more than 6.5 million phones with half of those smartphones.
Analysts expect Lenovo’s strong results to continue. Barclays Capital analyst Kirk Yang said in a research note:
We expect sales to reach $7 billion in FY4Q12 (up 44% y/y), by using the HDD shortage to gain market share from white box and clone segments.
By the numbers:
- Laptop revenue in the fiscal third quarter was $4.5 billion, up 30 percent from year ago. Laptops are 53 percent of Lenovo’s total sales.
- Desktop sales were $2.8 billion, up 39 percent from a year ago.
- Mobile devices and digital home sales were $565 million. Lenovo launched the A60 and P70 smartphones.
- In China, Lenovo delivered third quarter sales of $3.5 billion, up 30 percent from a year ago. China is 42 percent of Lenovo sales.
- Emerging market sales for Lenovo were $1.3 billion, up 13 percent. Latin America sales were up 54 percent.
- Mature market revenue was $3.6 billion, up 81 percent. The joint venture with NEC bolstered sales in Japan and Medion paid off in Germany.
