Lenovo posts strong Q3 results

Lenovo reported strong fiscal third quarter results as its PC market share crept up to 14 per cent globally and 35.3 per cent in China.

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(Credit: Lenovo)

The company reported a third quarter profit of US$154 million, or US$1.46 a share, on revenue of US$8.37 billion, up 44 per cent 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 — US, Japan and Europe — and grow the business in emerging markets such as Brazil. Lenovo also aims to own China, its home base.

(Credit: Lenovo)

According to the company, Lenovo's shipments were up 44 per cent 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 US$7 billion in FY4Q12 (up 44 per cent year-on-year), by using the HDD shortage to gain market share from white box and clone segments.

• Laptop revenue in the fiscal third quarter was US$4.5 billion, up 30 per cent from a year ago. Laptops are 53 per cent of Lenovo's total sales
• Desktop sales were US$2.8 billion, up 39 per cent from a year ago
• Mobile devices and digital home sales were US$565 million. Lenovo launched the A60 and P70 smartphones
• In China, Lenovo delivered third quarter sales of US$3.5 billion, up 30 per cent from a year ago. China is 42 per cent of Lenovo sales
• Emerging market sales for Lenovo were US$1.3 billion, up 13 per cent. Latin America sales were up 54 per cent
• Mature market revenue was US$3.6 billion, up 81 per cent. The joint venture with NEC bolstered sales in Japan and Medion paid off in Germany.

Via ZDNet US