Lenovo delivers strong Q2 result

Lenovo has reported a second-quarter profit of US$145 million on revenue of US$7.78 billion, up 35.2 per cent from a year ago. Lenovo's PC shipments were up 35.8 per cent from a year ago.

(Credit: Lenovo)

Lenovo rode a strong PC upgrade cycle in its fiscal second quarter as sales surged more than 35 per cent from a year ago. The company's diversification into mobile devices is also starting to pay off, as Lenovo became the number two tablet maker in China.

The company reported a second-quarter profit of US$145 million on revenue of US$7.78 billion, up 35.2 per cent from a year ago. Lenovo's PC shipments were up 35.8 per cent from a year ago.

Yang Yuanqing, Lenovo CEO, said that the integration of NEC and Medion went well, and noted that the company is "very optimistic about the future of the PC industry." Nevertheless, Lenovo is expanding into mobile devices.

According to Lenovo, the plan going forward consists of defending mature markets and expanding into emerging regions, as well as new categories, such as mobile devices.

Mobile devices are a small portion of Lenovo's overall sales, 3.6 per cent in the second quarter, but represent a lot of future growth. Lenovo touted sales of its A60 entry-level smartphone in China, and the launch of its Android tablets. Sales figures weren't disclosed.

Other notable points:

• Lenovo's China business delivered US$3.2 billion in sales for the second quarter, or 40.8 per cent of total revenue; PC shipments jumped 25.8 per cent in the third quarter compared to a year earlier
• Emerging market revenue for the second quarter was US$1.3 billion, or 16.6 per cent of revenue; Brazil, India, Latin America and Russia all averaged about a 42 per cent jump in units in the second quarter compared to a year ago
• Mature market revenue was US$3.3 billion, or 42.6 per cent of Lenovo's revenue
• Laptops accounted for 57.5 per cent of Lenovo's second-quarter sales, and units were up 35.4 per cent from a year ago. Desktops were 34.1 per cent of sales.

Separately, Yuanqing also became chairman. Founder Liu Chuanzhi will become honorary chairman. Chuanzhi will focus on growing Legend Holdings, parent of Lenovo, with the goal of launching an IPO in between 2014 and 2016.

Via ZDNet US